TLL FY18 Results Announcement
28 August 2018
Company Announcement
330 Devon St East, New Plymouth
NEW ZEALAND WIDE | NATIONAL & INTERNATIONAL FREIGHT AND LOGISTICS
TIL LOGISTICS GROUP REPORTS STRONG YEAR ON YEAR UPLIFT
Full Year Results Announcement for the 12 months ended 30 June 2018
• TIL Logistics Group has delivered a strong year on year result though below PFI.
• The Group has seen benefits from growth driven by acquisition and increasing sales.
• Major customer contract wins have been achieved in FY19 and businesses across the Group are
experiencing higher activity levels.
• The Board is confident in the ability of TIL Logistics to deliver continued growth and to increase shareholder
value.
• A dividend of 2.3 cents per share has been declared for FY18.
Listed transport and logistics group, TIL Logistics Group Limited (NZX:TLL), which is one of the largest domestic
freight and logistics businesses in New Zealand, has reported higher than expected sales and a strong year on
year uplift in results.
The company joined the NZX main board in December 2017 with plans to grow both organically and through
acquisition, and a number of new businesses have been integrated into the group, delivering synergies and
expanding the service offer.
FY18 results were significantly ahead of the previous year, although down on the expectations at the time of the
reverse listing due to factors including unexpected pressures within the construction industry, where many of
the major players are long term and valued clients of TIL, as well as bad weather and storms impacting on
transport needs and higher than expected operating costs.
Sales revenue for FY18 of $325.6 million was a 38% increase on the previous year, driven in part by newly
acquired businesses. The positive sales trend seen in the first half of FY18 continued into the second half of the
year. Total income of $331.5 million was ahead of the FY18 statutory revenue forecast (PFI).
Operating expenses were higher than PFI forecast due to:
• Rising fuel prices;
• Increased wage costs as an acute shortage of drivers has led to increased wage rates across the industry;
• Increased property rent costs reflecting additional warehouse capacity; and
• Higher fleet lease costs with TIL now leasing more trucks rather than purchasing them outright.
The result includes non-trading adjustments of $19.3 million comprising costs associated with the reverse listing
process and share based payments (as noted in the PFI) and the revaluation of deferred consideration related to
the acquisition of MOVE Logistics.
Including non-trading costs, Earnings (EBITDA) was $6.9 million. Excluding these non-trading costs, adjusted
EBITDA
ii
was up 49% on the prior period to $26.2 million. TIL’s net loss after tax was $(12.2) million, with an
adjusted net profit after tax of $7.1 million, up 20% on the prior year.
Directors have declared a 2.3 cents per share dividend for FY18. The new Dividend Reinvestment Plan (DRP),
which was released on 28 August 2018, will be available for those shareholders who wish to receive the Dividend
in the form of shares. Major shareholders have confirmed that they will participate in the DRP for the FY18
dividend.
Operating Performance
Overall, Group performance was pleasing as acquired businesses delivered synergy benefits and strengthened
the company’s ability to service all customer supply chain requirements.
The Freighting division, which comprises a number of regional, national and specialist trucking brands, delivered
a year on year uplift in revenue and EBITDA. Revenue was $220.8 million (68% of group revenue), and EBITDA
was $7.2 million. Bad weather and big storms were problematic in the second half of the financial year, closing
transport routes and impacting on the transport needs of large customers, particularly in the aquaculture and
viticulture sectors. In addition, rising wage and fuel costs as well as higher fleet lease costs affected results.
Initiatives are in place to deliver trading improvements in the businesses, with benefits expected to flow through
in FY19.
The Pacific Fuel Haul business performed above targets and continues to be a solid performer for the Group.
Since year end, the business has renewed its partnership with Z Energy, with the signing of a long-term, exclusive
strategic supply agreement.
The Logistics division, which provides warehousing and third party logistics primarily through MOVE Logistics,
delivered a pleasing first year performance. Revenue was $97.3 million (30% of group revenue) and EBITDA was
$7.3 million. Following the acquisition of MOVE Logistics in 2017, a number of new customer contracts were
acquired. While these contracts will provide strong cashflows and profitability over the long term, short term
costs to set up resourcing were incurred in FY18. Technology is a big enabler for the business and a new
Warehouse Management System was implemented in FY18. This will further enhance Logistics’ performance in
FY19 and future years.
The Asset Management division comprises the majority of the Group’s trucks and trailers and earnings are
generated from the leasing of assets to TIL Logistics Group businesses. EBITDA was $11.4 million for FY18.
CEO Alan Pearson said: “While below PFI forecasts, the results are a significant uplift on the prior year and the
company is well positioned for continued growth. We have been investing in our company, particularly in
technology, systems and health & safety, and are continuing to upgrade our fleet of some 900 trucks and 1,110
trailers.
“We have a number of initiatives underway to deliver improved trading performance, including the
commissioning of three new MOVE warehouses and technology improvements which will drive efficiencies.
These initiatives will provide long term benefit and deliver shareholder value. Major customer contract wins
have been achieved in FY19 to date and businesses across the Group are experiencing higher activity levels.”
Outlook
Activity levels across the industry remain high and the long term outlook for the industry is positive. Since year
end, a number of new customer contracts have been negotiated.
TIL Logistics expects to report an increased net profit for the June 2019 year and half yearly dividend payments
are expected to continue in FY19 in line with the company’s dividend policy. An additional $2.5 million in costs
related to the commissioning of three new warehouses and increased fleet lease costs are expected in FY19,
compared to PFI. An update on performance will be provided at the Annual Meeting later in the 2018 calendar
year.
Chairman of TIL Logistics, Trevor Janes, commented: “TIL Logistics has successfully integrated a number of
businesses to become one of the largest transport and logistics groups in New Zealand. The company has an
experienced management team, sophisticated operating and IT systems, a focus on health & safety and a strong
reputation in the industry.
“We have a number of acquisition opportunities which are being carefully assessed against strict criteria to
ensure they add value to the group. Management also remain focused on organic growth - increasing freight
volumes, improving utilisation, expanding the offer and driving efficiencies.
“There is growing demand for high quality, end to end freight and logistics supply chain solutions, and TIL has
the reputation, expertise and capability to take advantage of this. The Board is confident in the ability of TIL
Logistics to deliver continued growth and to increase shareholder value.”
ENDS
For further information and media assistance, please contact:
Alan Pearson
Chief Executive Officer
Phone: +64 6 7559457
Email: alan.pearson@til.kiwi
Jackie Ellis
Media Liaison
Phone: + 64 27 246 2505
Email: jackie@ellisandco.co.nz
About TIL Logistics Group Limited (TLL)
TLL is one of the largest domestic freight and logistics businesses in New Zealand, with a nationwide network of
branches, depots and warehouses. TLL’s activities include transporting and warehousing freight throughout New
Zealand and co-ordinating freight movements offshore with the assistance of international alliances. TLL also has
a specialist road tanker division which is one of the largest operators in the New Zealand fuel delivery market.
FY18 Results Financial Summary
*Non-trading costs of $6.5m associated with the reverse listing process and $11.6m in share based payments (as noted
in the PFI) and $1.2m relating to revaluation of deferred consideration for acquisitions in the prior period.
i
Further information on the Listing Profile PFI can be found in the Listing Profile and the Supplementary Financial Information
document, copies of which are available on TIL Logistics’ website
ii
Non-GAAP financial information: TIL Logistics Group uses several non-GAAP measures when discussing financial performance.
These include Earnings Before Interest, Tax, Depreciation and Amortisation, Share of (Loss)/Profit of Associates and Impairment of
Goodwill (EBITDA), adjusted EBITDA excluding non-trading costs and adjusted Net Profit/Loss After Tax (NPAT/NLAT) excluding non-
trading costs. Management believes that these measures provide useful information on the underlying performance of TIL
Logistics’ business. Reconciliations of the non-GAAP measures to GAAP measures, can be found in TIL Logistics Group’s FY18
Financial Statements that are available on the company’s website.
REPORTED LISTING PROFILE PFI
i
$ Millions FY18 FY17 FY2018F
Pro Forma
FY2018F
Statutory
Sales Revenue 325.6 235.3 - -
Total Income 331.5 239.3 328.8 327.8
EBITDA
ii
6.9 17.6 - 9.5
Non-trading costs* 19.3 - - -
Adjusted EBITDA excluding non-trading costs
ii
26.2 17.6 28.2 -
NPAT/NLAT attributable to security holders (12.2) 5.9 - (10.3)
Adjusted NPAT excluding non-trading costs
ii
7.1 5.9 8.5 -
Net operating cashflows 10.4 16.1 14.2 14.2
---
TIL LOGISTICS
GROUP LIMITED
FY18 RESULTS PRESENTATION
FOR THE YEAR ENDED 30 JUNE 2018
1
ABOUT TIL LOGISTICS GROUP
TIL Logistics Group FY18 Results Presentation
•One of New Zealand’s largest
domestic freight and logistics
platforms
•Nationwide network of branches,
depots and warehouses with 60
locations and over 150,000m2 of
warehousing space
•Dedicated team of over 1,700
employees and contractors
•Fleet of some 900 trucks, 1,110
trailers, 310 forklifts and 170 light
vehicles
•Operates one of the largest
petroleum product Dangerous
Goods (DG) road tanker fleets in
the country
2
FY18 KEY EVENTS
Busy year with highlights being the successful reverse listing transaction and expansion of Logistics
division
•Significantly expanded Warehousing and Logistics offer -successful integration of acquired businesses
•Implemented a new Warehouse Management System throughout MOVE sites
•Negotiated a number of major new customer contracts (including renewal of partnership with Z
Energy post-year end)
•Continued to upgrade the Fleet with around 90 new vehicles, including trucks and trailers, entering
the operation
•Completed reverse listing on 6 December 2017, changed name to TIL Logistics Group Limited (NZX:
TLL) and appointment of a new Board including three independent Directors
•Alan Pearson commenced as the new TIL Logistics Group CEO from March 2018
•Year on year uplift in results, mainly driven by acquired businesses, however down on PFI due to
increased operating expenses and other business and operational factors not included in PFI
3
TIL Logistics Group FY18 Results Presentation
FULL YEAR
RESULTS
SUMMARY
4
TIL Logistics Group FY18 Results Presentation
•Non-trading costs of $6.5m associated with the reverse listing process and $11.6m in share based
payments (as noted in the PFI) and $1.2m relating to revaluation of deferred consideration for
acquisitions in the prior period.
•See the glossary slide for an explanation of FY18 EBITDA, adjusted EBITDA and adjusted NPAT.
•Non-GAAP information: A reconciliation of non-GAAP to GAAP measures is included in the FY18
Financial Statements.
Total Income$ 331.5 million
EBITDA$6.9 million
ADJUSTED EBITDA
excluding non-trading costs*
$26.2 million
NLAT
Attributable to security holders
$(12.2) million
ADJUSTED NPAT
excluding non-trading costs*
$7.1 million
Dividend2.3cps
FY18 RESULTS SNAPSHOT
REPORTED
$MillionsFY18FY17% Change
Sales Revenue
325.6235.3
38%
Total Income
331.5239.3
39%
EBITDA
6.917.6
(60.1)%
Non-trading costs
19.3-
Adjusted EBITDA excluding non-trading costs
26.217.6
49%
NPAT/NLAT
(12.2)5.9
Adjusted NPAT excluding non-trading costs
7.15.9
20%
Total Assets
151.7147.8
Total Debt
73.90.1
5
See pages 56 to 61 of the Listing Profile for prospective pro forma financial information for FY18 and FY19. The primary differences between FY2018 pro forma and statutory
information in the Listing Profile are the exclusion from pro forma of one off costs associated with the reverse listing transaction and the inclusion of a full twelve months’
contribution of the recently acquired Glassworks business.
LISTING PROFILE PFI
FY2018F
Pro Forma
FY2018F
Statutory
328.8327.8
9.5
28.228.7
(10.3)
8.5
152.7152.7
(75.5)(75.5)
YEAR ON YEAR UPLIFT
On an adjusted basis excluding non-trading costs
239.3
331.5
0
100
200
300
400
Total Income
FY17FY18
6TIL Logistics Group FY18 Results Presentation
17.6
6.9
26.2
0
10
20
30
EBITDA
FY17FY18FY18A
5.9
-12.2
7.1
-15
-10
-5
0
5
10
NPAT
Sales revenue $325.6m, up 38% YoY
Strong sales in 1H18 carried through into
2H18
Benefit of new business acquisitions and
expanded Logistics offer accounted for
major portion of increase
Operating expenses impacted by rising fuel
prices, increased wage and rent cost and
higher fleet lease costs
Adjusted EBITDA $26.2m, up 49% YoY
Adjusted NPAT $7.1m, up 20% YoY
229.8
337.2
0
100
200
300
400
Operating Expenses
FY17: FY18 EBITDA BRIDGE
Excluding non-trading costs, FY18 Adjusted EBITDA was up 49% on FY17 to $26.2m
•Benefit from expansion of Logistics
segment-NZL Group and Move
Logistics acquired in May and June
2017 respectively
•Asset Management benefited from
inclusion of MOVE’s Southern Fleet
Lease company
•Other includes contribution from
freight forwarding businesses, and
corporate services
•Non-trading costs of $6.5m associated
with the reverse listing process and
$11.6m in share based payments (as
noted in the PFI) and $1.2m relating
to revaluation of deferred
consideration for acquisitions in the
prior period.
7TIL Logistics Group FY18 Results Presentation
PFI TO REPORTED EBITDA AND NPAT
8TIL Logistics Group FY18 Results Presentation
CAPITAL MANAGEMENT
•Focus on debt reduction: Asset sales
to repay debt
9TIL Logistics Group FY18 Results Presentation
See page 56 of the Listing Profile for an explanation of pro forma adjustments for debt
73.5
75.5
63.8
0
10
20
30
40
50
60
70
80
Actual FY18Proforma FY18 FcastProforma FY19 Fcast
$Millions
TOTAL DEBT
SEGMENT REVENUE AND EARNINGS
0
100
200
300
400
FY17FY18
$ Millions
REVENUE
10
TIL Logistics Group FY18 Results Presentation
0
5
10
15
20
25
30
FY17FY18
$ Millions
ADJUSTED EBITDA
FY18 REVENUE
FY18 ADJ EBITDA
Non-trading costs of $6.5m associated with the reverse listing
process and $11.6m in share based payments (as noted in the
PFI) and $1.2m relating to revaluation of deferred
consideration for acquisitions in the prior period. See the TLL
FY18 Financial Statements for a reconciliation of non-GAAP to
GAAP measures.
Freighting: Solid performance from existing
businesses. Initiatives in place to drive sales
growth
Logistics: Primarily comprises NZL Group and
Move Logistics, acquired in late FY17, both
of which are performing well
Asset Management: Earnings generated
from leasing of trucks and trailers to TIL
Logistics businesses
Other: Includes small contribution from
freight forwarding services.
FREIGHTING
Revenue $220.8m (68% of group revenue)
Adjusted EBITDA $7.2m
TIL Logistics is one of the largest freight transport companies in New Zealand and has a
nationwide network with regional strength and speciality services
•Grew the client base and welcomed a number of new clients
•Adverse climatic conditions caused problems in 2H18
•Impact of rising wage and fuel costs as well as higher fleet lease costs
•The company has initiated a number of cost reduction, efficiency and waste
minimisation projects
•Investigating opportunities to develop new services within the Group. Focus on
expansion of specialist trucking operations
•Looking to increase the number of owner-operators within the fleet
•Initiatives are in place to drive productivity improvements, with benefits expected to
flow through in FY19.
TIL Logistics Group FY18 Results Presentation11
LOGISTICS
Revenue $97.3m (30% of group revenue)
Adjusted EBITDA $7.1m
TIL Logistics’ expanded warehousing offering provides tangible
opportunities for increased customer engagement and growth
•Successfully integrated NZL Group and MOVE Logistics into the Group
•Signed new customer contracts including freight handling ventures
between MOVE Logistics and the Ports of Auckland and LytteltonPort
•Short term costs associated with setting up resourcing for new
contracts
•Implementation of new Warehouse Management System
•Acquired Seamount Enterprises’ fleet and Glassworks Logistics’
logistics and supply services businesses which have been integrated
into MOVE Logistics
•Three new warehouse openings planned for FY19, taking total
capacity to 195,000m2
TIL Logistics Group FY18 Results Presentation12
ASSET MANAGEMENT
Adjusted EBITDA $11.4m
Comprises the majority of the Group’s trucks and
trailers. Revenue generated from leasing of assets to
TIL Logistics Group businesses
•Increased assets and earnings reflecting expanded
TIL Logistics Group portfolio of businesses
•MOVE’s Southern Fleet Lease company added in
FY18
TIL Logistics Group FY18 Results Presentation13
OUTLOOK
Activity levels across the industry
remain high and long term outlook is
positive
Additional $2.5m in costs and
investments expected in FY19,
compared to PFI
-Commissioning of three new
warehouses for MOVE
-Investment into technology, people,
health & safety
-Additional fleet leasing
Half yearly dividend payments
expected to continue in FY19, in line
with dividend policy
Continue to assess acquisition
opportunities
Focus on organic growth -increasing
freight volumes, improving utilisation,
expanding the offer and driving
efficiencies.
TIL Logistics Group FY18 Results Presentation
14
“There is growing demand for high quality, end to end freight
and logistics supply chain solutions, and TIL has the reputation,
expertise and capability to take advantage of this.”
Trevor Janes, Chairman
GROWTH
DRIVERS AND
OPPORTUNITIES
15
INCREASE THE VOLUME OF FREIGHT TRANSPORTED BY TIL:
•Selectively target new customers that align with TIL Logistics’
platform
•Capture a greater proportion of existing customers’ supply
chains
IMPROVE UTILISATION LEVELS OF EXISTING AND NEW
NETWORKS:
•Increase volumes on existing platform with minimal investment
•Intermodal expansion –utilisationof rail and coastal shipping
MINIMISE COSTS OF SERVICES PROVIDED:
•Make the most of TIL Logistics’ inherent operating leverage
•Leverage technology, exploit available cost efficiencies and
scale
OFFER CUSTOMERS A BROADER RANGE OF SERVICES:
•Ability to offer a full range of logistics services
GROWTH THROUGH ACQUISITION
TIL Logistics Group FY18 Results Presentation
STRONG BOARD AND MANAGEMENT TEAM
BOARD
•Trevor Janes, Independent Chair
•Greg Kern, Non-executive Director
•Lorraine Witten, Independent Director
•Danny Chan, Independent Director
•Jim Ramsay, Executive Director
TIL Logistics’ Board comprises highly experienced
Directors with particular strength in corporate
governance and oversight of growing companies.
EXECUTIVE LEADERSHIP
•Alan Pearson, CEO as at 19 March 2018
Alan has over 35 years commercial experience in both
public and private companies, including ten years as
Managing Director of Halls Group Limited, which is one
of New Zealand’s largest transport & logistics
companies (primarily involved with temperature
controlled supply chains for both domestic and export
food markets)
•Greg Whitham, CFO
•Alan Terris, International & Group Marketing
Director
16
TIL Logistics Group FY18 Results Presentation
CONTACT
17
GLOSSARY
•Pro forma historical financial information has been sourced from audited and unaudited financial statements and management reports that are available
on the TIL Logistics Website under Investor Centre/TIL Transaction. Details of consolidation and other pro forma adjustments canbe found in the
Supplementary Financial Information on the TIL Logistics website under Investor Centre/TIL Transaction.
•Non-GAAP financial information: TIL Logistics Group uses several non-GAAP measures when discussing financial performance. These include Earnings
Before Interest, Tax, Depreciation and Amortisation, Share of (Loss)/Profit of Associates and Impairment of Goodwill (EBITDA), adjusted EBITDA excluding
non-trading costs and adjusted Net Profit/Loss After Tax (NPAT/NLAT) excluding non-trading costs. Management believes that thesemeasures provide
useful information on the underlying performance of TIL Logistics’ business.Reconciliations of the non-GAAP measures to GAAP measures, can be found
in TIL Logistics Group’s FY18 Financial Statements that are available on the company’s website.
•EBITDArefers to Earnings Before Interest, Tax, Depreciation and Amortisation excluding income from associates. EBITDA and pro formaEBITDA are non-
GAAP profit measures. TIL considers that pro forma EBITDA, which normalises performance for certain structural changes withinthe business and
removes the impact of a number of non-recurring items, allows for a better comparison of operating performance over the historical and PFI period and
for comparison with that of other company. Reconciliations between pro forma EBITDA and GAAP profit measures are contained within the
Supplementary Financial Information.
•FY18 EBITDA is Earnings Before Interest, Tax, Depreciation and Amortisation, Share of (Loss)/Profit of Associates and Impairment of Goodwill(EBITDA)
•NPAT/NLAT refers to net profit/loss after tax. Pro forma NPAT in FY2015-FY2018F represents NPAT after allowing for pro forma adjustments as discussed
under the heading “Financial Information Presented” above. There are no pro forma adjustments included in the FY2019F NPAT. Pro forma NPAT is a
non-GAAP measure. Reconciliations between pro forma NPAT and GAAP profit measures are contained within the Supplementary Financial Information.
•Adjusted EBITDA/Adjusted NPAT: Removes the impact of non-trading costs. The Board believes this provides a better reflection of the company’s
underlying performance.
•Pro forma net cash flows from operating activities is a non-GAAP profit measure. Pro forma net cash flows from operating activities have been calculated
as net cash flows from operating activities adjusted for the cash impact of the pro forma adjustments. The SupplementaryFinancial Information contains
reconciliationsbetween pro forma net cash flows from operating activities and GAAP profit measures.
18TIL Logistics Group FY18 Results Presentation
19
DISCLAIMER
This presentation has been prepared by TIL Logistics Group Limited (“TLL”).The information in this presentation is of a general nature only. It is not a
complete description of TLL.
This presentation is not a recommendation or offer of financial products for subscription, purchase or sale, or an invitationorsolicitation for such
offers.
This presentation is not intended as investment, financial or other advice and must not be relied on by any prospective investor.It does not take into
account any particular prospective investor’s objectives, financial situation, circumstances or needs, and does not purport to contain all the
information that a prospective investor may require. Any person who is considering an investment in TLL securities should obtainindependent
professional advice prior to making an investment decision, and should make any investment decision having regard to that person’s own objectives,
financial situation, circumstances and needs.
Past performance information contained in this presentation should not be relied upon (and is not) an indication of future performance.This
presentation may also contain forward looking statements with respect to the financial condition, results of operations and business, and business
strategy of TLL. Information about the future, by its nature, involves inherent risks and uncertainties. Accordingly, nothinginthis presentation is a
promise or representation as to the future or a promise or representation that an transaction or outcome referred to in this presentation will proceed
or occur on the basis described in this presentation. Statements or assumptions in this presentation as to future matters mayprove to be incorrect.
A number of financial measures are used in this presentation and should not be considered in isolation from, or as a substitute for, the information
provided in the TLL Listing Profile.
TLL and its related companies and their respective directors, employees and representatives make no representation or warranty of any nature
(including as to accuracy or completeness) in respect of this presentation and will have no liability (including for negligence)for any errors in or
omissions from, or for any loss (whether foreseeable or not) arising in connection with the use of or reliance on, information in this presentation.
TIL Logistics Group FY18 Results Presentation
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TIL Logistics Group Limited
Results for announcement to the market
Appendix 1
Reporting Period 12 months to 30 June 2018
Previous Reporting Period 12 months to 30 June 2017
Amount (000s) Percentage change
Revenue from ordinary
activities
NZ$325,552 38%
Profit (loss) from ordinary
activities after tax attributable
to security holder
NZ$(12,191) -305%
Net profit (loss) attributable to
security holders
NZ$(12,191) -305%
Interim/Final Dividend Amount per security Imputed amount per security
Final Dividend 2.3 cents per share 0.961 cents per share
Record Date 14
th
September 2018
Dividend Payment Date 28
th
September 2018
Dividend Reinvestment Plan
TIL Logistics Group Limited has established a ‘Dividend Reinvestment Plan’ (DRP). Documents
associated with the DRP will be sent to shareholders on 28 August 2018. In order to participate in the
DRP in respect of the Final Dividend referred to above, a participation election must be received in
accordance with the terms of the DRP by 5pm NZT 14 September 2018.
Financial Information and Commentary
The group financial statements contained in TIL Logistics Group Limited’s Financial Report for the
12 month period ended 30 June 2018 reflect:
• the results of the ‘carved out’ business operations of Transport Investments Limited (now
named Bowker Holdings 99 Limited) (being the transport and logistics business and assets
acquired by TIL Logistics Group Limited under its reverse listing transaction in December 2017)
for the period from 1 July 2017 to 6 December 2017; and
• the results of the TIL Logistics Group Limited group (which includes the transport and logistics
business and assets of Transport Investments Limited acquired) from 7 December 2017 to 30
June 2018.
The comparative statement of profit or loss and other comprehensive income for the 12 months ended
30 June 2017 and the comparative balance sheet as at 30 June 2017, reflect the results and financial
position of the ‘carved out’ business and assets of Transport Investments Limited.
The reported loss includes one-off costs of $6.5m associated with the reverse listing process, $11.6m
in share-based payments, and $1.2m relating to additional provision for deferred consideration on a
prior year acquisition. Adjusted profit excluding these adjustments is NZ$7.1m.
For more commentary on the results please refer to the media announcement and TIL Logistics Group
Limited’s Financial Report for the 12 months ended 30 June 2018. This Appendix 1 should be read in
conjunction with the group financial statements for the 12 months ended 30 June 2018.
Net Tangible Assets per Security
30 June 2018 30 June 2017
Net tangible assets $000 3,356 78,744
Number of ordinary securities 81,459,483 72,833,334
Net tangible asset backing per ordinary security $ .04 1.08
The number of ordinary securities as at 30 June 2018 reflects the actual number of ordinary securities
in TIL Logistics Group Limited on issue as at that date.
The number of ordinary securities as at 30 June 2017 reflects the actual number of shares of
Transport Investments Limited on issue at that date together with the number of shares issued by TIL
Logistics Group Limited as consideration under the reverse listing transaction. This figure has been
used for comparative purposes in accordance with IFRS guidance.
Control gained and lost over Entities
Refer to group financial statements.
Associates & Joint Ventures
Refer to group financial statements.
Changes in Accounting Policies
Following the acquisition of the transport and logistics business and assets of Transport Investments
Limited TIL Logistics Group Limited adopted the accounting policies of Transport Investments Limited.
These accounting policies are outlined in TIL Logistics Group Limited’s Financial Report for the 12
month period ended 30 June 2018.
FMA Exemption
Following the acquisition of the transport and logistics business and assets of Transport Investments
Limited, TIL Logistics Group Limited changed its balance date from 31 March to 30 June. This aligned
with the balance date of the acquired business.
Financial reporting legislation requires group financial statements to be prepared each year from the
date of the previously reported financial statements. In the case of the TIL Logistics Group Limited
group this would require financial statements to be prepared for the 15 month period from 1 April
2017 to 30 June 2018. However, to provide meaningful, relevant and comparable information to the
shareholders and users of the group financial statements, TIL Logistics Group Limited sought and
received an exemption from the Financial Markets Authority to permit TIL Logistics Group Limited to
prepare group financial statements for the 12 month accounting period from 1 July 2017 to 30 June
2018. Accordingly, TIL Logistics Group Limited’s Financial Report includes group financial statements
for the 12 month accounting period from 1 July 2017 to 30 June 2018 as set out above.
Refer to group financial statements for further details regarding this exemption.
Audit
This report is based on audited group financial statements. PricewaterhouseCoopers has issued an
Audit report on those group financial statements.
---
APPENDIX 7 – NZSX Listing Rules
Number of pages including this one
(Please provide any other relevant
NZSX Listing Rule 7.12.2. For rights, NZSX Listing Rules 7.10.9 and 7.10.10. details on additional pages)
For change to allotment, NZSX Listing Rule 7.12.1, a separate advice is required.
Full name
of Issuer
Name of officer authorised to
Authority for event,
make this notice
e.g. Directors' resolution
Contact phone
Contact fax
numbernumber
Date
Nature of event
BonusIf ticked,
Rights Issue
Tick as appropriate
Issue
state whether:Taxable
/ Non TaxableConversionInterestRenouncable
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EMAIL: announce@nzx.com
Notice of event affecting securities
TIL Logistics Group Limited
G P WhithamDirectors resolution
06 75599902882018
Ordinary sharesNZMOWE0001S5
In dollars and cents
Retained Earnings
$0.023
Enter N/A if not
applicable
$$0.001716$0.009612
NZD
$1,873,568.11
Date Payable
14/09/201828/09/2018
---
TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
ANNUAL
FINANCIAL
STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2018
FINANCIAL STATEMENTS
1TIL LOGISTICS GROUP LIMITED ANNUAL REPORTANNUAL FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF PROFIT OR LOSS &
OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2018
NOTES
30 JUNE 2018
$000
30 JUNE 2017
$000
Revenue 7325,552235,266
Gains on disposal of assets 1,9211,287
Dividends received 224
Rents received 3,0682,227
Other income 981452
Total Income 331,524239,256
Transport costs8(139,731)(112,989)
Employee costs8(114,902)(80,627)
Lease expenses8(31,805)(16,880)
Other operating expenses8(18,898)(11,133)
Share based payment expense 21(11,593)-
IPO / listing costs 8(6,545)-
Changes in contingent consideration4.b/8(1,191)-
Depreciation/amortisation expenses 13.1(12,417)(8,133)
Impairment of goodwill(159)-
Total Operating Expenses 8(337,241)(229,762)
Finance costs - interest on borrowing(3,431)(1,704)
Interest income on short term deposit102134
Operating (deficit) / surplus before income tax(9,046)7,924
Share of (loss) / profit of associates 17.2(127)50
(Loss) / Profit Before Income Tax (9,173)7,974
Income tax expense 9(2,490)(1,961)
(LOSS) / PROFIT FOR THE PERIOD FROM CONTINUING
OPERATIONS
(11,663)6,013
(Loss) / Profit attributable to:
Owners of the parent(12,191)5,941
Non-controlling interests17.252872
(11,663)6,013
Other comprehensive income
Comprehensive Income for the Period, Net of Tax --
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD,
NET OF TAX
(11,663)6,013
Earnings per share for (loss) / profit attributable to the
ordinary equity holders for the company
CENTSCENTS
Basic and diluted (loss) / earnings per share 11(.15).08
The above consolidated statement of profit or loss & other comprehensive income should be read in conjunction with the accompanying
notes.
2TIL LOGISTICS GROUP LIMITED ANNUAL REPORTANNUAL FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2018
NOTES
30 JUNE 2018
$000
30 JUNE 2017
$000
ASSETS
Current Assets
Cash and cash equivalents 12.12,8812,966
Inventories 279227
Trade and other receivables 12.246,57839,349
Tax receivable269-
Advances to associates 12.3603477
Total Current Assets 50,61043,019
Non-current Assets
Property, plant and equipment 13.174,61679,583
Intangible assets 13.224,61324,074
Investments in associates 17.21,8792,144
Total Non-Current Assets 101,108105,801
TOTAL ASSETS 151,718148,820
EQUITY
Share capital1428,107-
Invested capital 15-102,012
(Accumulated losses) / Retained earnings (1,295)-
Equity attributable to owners of the parent 26,812102,012
Non-controlling interest in equity17.21,157806
TOTAL EQUITY 27,969102,818
LIABILITIES
Current Liabilities
Trade and other payables 12.431,67029,746
Borrowings 12.53,43232
Employee entitlements 12.611,75111,031
Provision for other liabilities and charges13.42,192-
Tax payable -314
Total Current Liabilities 49,04541,123
Non-current Liabilities
Borrowings 12.570,447133
Deferred income tax liability 13.33,4713,376
Provisions for other liabilities and charges 13.47861,370
Total Non-current Liabilities74,7044,879
TOTAL LIABILITIES 123,74946,002
TOTAL EQUITY & LIABILITIES 151,718148,820
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
Trevor Janes - Chairman
28 August 2018
Lorraine Witten - Director
28 August 2018
3TIL LOGISTICS GROUP LIMITED ANNUAL REPORTANNUAL FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2018
ATTRIBUTABLE TO OWNERS OF THE
COMPANY
INVESTED CAPITALSHARE CAPITALRETAINED EARNINGS/(ACCUM. LOSSES)TOTAL NON-CONTROLLING INTERESTTOTAL EQUITY
$000$000$000$000$000$000
Balance as at 1 July 201635,390-22,01557,4051,30658,711
Comprehensive income
Profit for the period --5,9415,941726,013
Other comprehensive income ------
Total Comprehensive Income--5,9415,941726,013
Transaction with owners:
Changes in invested capital 66,622-(27,691)38,931-38,931
Dividends --(265)(265)(572)(837)
Balance as at 30 June 2017102,012--102,012806102,818
Balance as at 1 July 2017 102,012--102,012806102,818
Comprehensive income 1 July to 6 December
(Loss)/profit for the period4,668--4,668-4,668
Other comprehensive income------
Total comprehensive income 1 July to 6 December4,668--4,668-4,668
Transactions with owners in their capacity as
owners:
Equity transactions with Bowker 99127--12777204
Dividends provided or paid------
Total transactions with owners prior to reverse
listing
127--12777204
Reverse listing on 7 December 2017(106,807)5,473101,334---
Balance on reverse listing-5,473101,334106,807883107,690
Comprehensive income 7 December 2017 to 30
June 2018
(Loss)/profit for the period--(16,859)(16,859)528(16,331)
Other comprehensive income------
Total comprehensive income 7 December 2017 to
30 June 2018
--(16,859)(16,859)528(16,331)
Transactions with owners in their capacity as
owners:
Deemed consideration for the acquisition of TIL
Logistics Group Limited (formerly Bethunes)
-678-678-678
Equity-settled share-based payments-10,596-10,596-10,596
Issues of ordinary shares in a public offer-11,360-11,360-11,360
Distribution to owners as part of reverse listing--(85,770)(85,770)-(85,770)
Dividends provided for or paid----(254)(254)
Total transactions with owners on/after reverse
listing
-22,634(85,770)(63,136)(254)(63,390)
Balance as at 30 June 2018-28,107(1,295)26,8121,15727,969
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
4TIL LOGISTICS GROUP LIMITED ANNUAL REPORTANNUAL FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2018
NOTES
30 JUNE 2018
$000
30 JUNE 2017
$000
Cash flows from operating activities
Receipts from customers 323,035237,697
Interest received 102134
Dividends received 224
Payments to suppliers and employees (306,283)(218,628)
Interest paid (3,286)(1,704)
Income tax paid (3,218)(1,411)
Net cash generated from operating activities 16.110,35216,112
Cash flows used in investing activities
Purchase of business, net of cash acquired18(3,200)(37,403)
Purchase of property, plant and equipment(13,174)(15,837)
Proceeds from sale of property, plant and equipment14,3669,706
Purchase of intangible assets(1,107)(310)
Advances to associates 11191
Net cash used in investing activities (3,104)(43,653)
Cash flows from financing activities
Repayment of borrowings16.2(16,432)-
Proceeds from borrowings16.290,000(8,525)
Proceeds from share issue11,510-
Capital distribution to company shareholders(92,156)38,931
Dividends paid to shareholders/non-controlling interests(255)(837)
Net cash flow from financing activities(7,333)29,569
Net increase in cash and cash equivalents(85)2,028
Cash and cash equivalents at beginning of period 2,966938
Cash and cash equivalents at end of period12.12,8812,966
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 5TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
1. GENERAL INFORMATION
Bethunes Investments Limited (subsequently renamed
TIL Logistics Group Limited) a non trading company
listed on the NZX Main Board had been actively
seeking an acquisition opportunity. On 6th December
2017 it completed an acquisition of the transport and
logistics business of Transport Investments Limited
(subsequently renamed Bowker Holdings 99 Limited)
and the shares in Global Logistics Limited. The
transaction was satisfied by an issue of 73,333,334 new
shares in Bethunes Investments Limited (Bethunes) and
the balance in cash. Concurrent with the acquisition,
and in order to part fund the cash component of the
purchase price, Bethunes Investments Ltd undertook
a private placement of new issued shares to selected
wholesale investors. On completion of the transaction
the existing Board of Directors was replaced with new
directors who were part of the Transport Investments
Limited company. The existing shares in Bethunes
Investments Limited, upon the transaction, were
consolidated on a 1:254 basis.
1.1. REPORTING ENTITY
The core operations of TIL Logistics Group Limited
(“TIL Logistics” or the “Company”) and its subsidiaries
(collectively “the Group”) are in the New Zealand
transport sector. These include general transport,
bulk liquids, heavy haulage, shipping, storage and
distribution, national and international household
removals and storage.
The Company is incorporated and domiciled in New
Zealand, registered under the Companies Act 1993 and
is a FMC Reporting Entity under the Financial Markets
Conduct Act 2013. The Company is listed on the NZX
main board.
The registered office of the Company is at 330 Devon
Street East, New Plymouth, New Zealand.
The consolidated financial statements of the Company
as at, and for the year ended, 30 June 2018, comprise
the Company and its subsidiaries (refer note 17.1), and
acquired assets from Transport Investments Limited,
together referred to as the “Group”.
These financial statements were authorised by the
Board of Directors on 28 August 2018.
1.2. BASIS OF PREPARATION
a. Carve-out and reverse listing
To facilitate a listing of the transport and logistics
business of Transport Investments Limited
(subsequently renamed Bowker Holdings 99 Limited),
“the Business”, together with the shares in a related
entity, Global Logistics Limited, were acquired by TIL
Logistics Group Limited (formerly Bethunes Investments
Limited), a listed non-trading company. The acquisition
was satisfied by TIL Logistics Group Limited issuing
shares and paying cash to the former owners of the
Business.
As a result of the transaction, the former owners of
the Business obtained control of TIL Logistics Group
Limited. Due to this, Management considered it
appropriate to account for the transaction as a ‘reverse
acquisition’. The ‘carved out’ Business of Transport
Investments Limited (including Global Logistics Limited)
was identified as the accounting acquirer, and TIL
Logistics Group Limited, the listed non-trading entity,
was identified as the accounting acquiree.
Consequently, these consolidated financial statements,
although under the name of TIL Logistics Group
Limited, the legal parent, represent a continuation
of the carved out business operations of Transport
Investments Limited. The carved out Business of
Transport Investments Limited, being the accounting
acquirer, is deemed to have issued shares to obtain
control of the acquiree, TIL Logistics Group Limited
(note 14). However, because TIL Logistics Group
Limited, the accounting acquiree, is not a business,
the transaction is not a business combination within
the scope of NZ IFRS 3. The difference between the
fair value of the shares deemed to have been issued to
obtain control of TIL Logistics Group Limited, and the
fair value of TIL Logistics Group Limited’s identifiable
net assets has been recognised as an equity-settled
share based payment for services received in the form
of a stock exchange listing (notes 14,21.1).
These financial statements reflect the results of
the carved out business operations of Transport
Investments Limited for the period from 1 July 2017 to
6 December 2017 and the results of the TIL Logistics
Group Limited group (which includes the transport and
logistics business of Transport Investments Limited
acquired) from 7 December 2017 to 30 June 2018.
The comparative statement of profit or loss & other
comprehensive income for the year ended 30 June 2017
and the comparative balance sheet as at 30 June 2017,
reflect the results and financial position of the carved
out Business of Transport Investments Limited. The
equity of the ‘carved out’ Business prior to the listing
transaction has been presented as ‘Invested capital’ as
the Business was not legally part of the TIL Logistics
Group prior to this date. Upon listing, invested capital
has been reallocated to share capital and other reserves,
being retained earnings only. The amount recognised
as share capital uses the share capital of the previous
Transport Investments Limited group as a proxy, with
the balance recognised within retained earnings.
The carved out financial information has been prepared
on a basis that reflects the business and assets of
Transport Investments Limited legally acquired by
TIL Logistics Group Limited on 6 December 2017.
Specifically, it excludes the results and financial position
of a subsidiary of Transport Investments Limited not
acquired as part of the transaction. It also excludes
debt of Transport Investments Limited that was not
part of the liabilities acquired, together with interest
thereon, such that the carved out results and financial
position of Transport Investments Limited reflect a
debt-free business. This is not reflective of the position
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 6TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
following the transaction, which involved TIL Logistics
Group Limited entering into a new banking facility (note
12.5) to fund the payment of cash consideration to the
former owners of the Business acquired, together with
transaction costs and the working capital requirements
of the Group.
A reconciliation between the carved out financial
information presented in these financial statements
and the previously reported financial information of
Transport Investments Limited, from which the carved
out information has been extracted, is included in note
4(c).
b. Further information on basis of preparation
These financial statements have been prepared on a
historical cost basis.
The preparation of financial statements in conformity
with NZ IFRS requires the use of certain critical
accounting estimates. It also requires Management
to exercise its judgement in the process of applying
the Group’s accounting policies. The areas where
assumptions and estimates are significant to the
consolidated financial statements are disclosed in
note 4.
The principal accounting policies adopted in the
preparation of the financial statements are selected and
applied in a manner which ensures that the resulting
financial information satisfies the concepts of relevance
and reliability, thereby ensuring that the substance of
the underlying transaction and other events is reported.
These policies have been consistently applied to all the
periods presented, unless otherwise stated.
c. Reporting exemptions
The legal parent of the Group is TIL Logistics Group
Limited (TLL) (previously named Bethunes Investments
Limited). After the reverse listing transaction the Group
changed the balance date of TLL from 31 March to 30
June. This aligned with the balance date of the business
of the accounting acquirer (Transport Investments
Limited).
Financial reporting legislation requires financial
statements to be prepared each year from the date
of the previously reported financial statements. In the
case of the Group this means financial statements were
required for the 15 month period from 1 April 2017 to
30 June 2018. This period reflects the date from when
TLL last prepared financial statements. Comparative
information would also be required for the 12 months
from 1 April 2016 to 31 March 2017.
These reporting obligations do not align with:
• the previously reported financial statements of
the transferred business of Transport Investments
Limited;
• PFI information included in the profile document.
To provide meaningful (relevant and comparable)
information to the Group’s shareholders and users
of the financial statements, the Group sought and
received an exemption from the FMA. The exemption
permitted the Group to prepare financial statements
for the 12 month period to 30 June 2018. Specifically,
the exemption, exempted the Group from section 461(1)
of the Financial Markets Conduct Act 2013 in respect
of the preparation of financial statements that comply
with generally accepted accounting practice to the
extent that generally accepted accounting practice
requires TIL Logistics Group to prepare group financial
statements for a 15-month accounting period ending on
the specified balance date.
Conditions associated with the exemption were that TIL
Logistics Group Limited:
• ensures that, within 4 months of its balance
date, group financial statements are completed
in relation to the group for the 12-month period
ended on the specified balance date;
• includes comparative information for the period
from 1 July 2016 to 30 June 2017 in the group
financial statements;
• ensures that the group financial statements
comply in all other respects with Part 7 of the Act
and generally accepted accounting practice; and
• clearly and prominently discloses this exemption
notice, its conditions, and its implications in the
group financial statements.
1.3. STATEMENT OF COMPLIANCE
The Group is a for-profit entity. Its financial statements
have been prepared in accordance with, and comply
with, New Zealand Generally Accepted Accounting
Practice (NZ GAAP). They comply with New Zealand
Equivalents to International Financial Reporting
Standards and other applicable Financial Reporting
Standards and Authoritive Notices, as appropriate for
for-profit entities. The Financial Statements comply with
International Financial Reporting Standards (IFRS).
The comparative financial statements of the TIL
business have been extracted from the financial
statements and accounting records of Transport
Investments Limited for the period ended 30 June
2017 (refer note 4) which comply with NZ IFRS. The
comparative information comprises historical income
and expenses, assets and liabilities and cash flows
attributable to the TIL business.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 7TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
2. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
2.1. CONSOLIDATION
a. Subsidiaries
Subsidiaries are all entities over which the Group has
control. The Group controls an entity when the Group
is exposed to, or has rights to, variable returns from its
involvement with the entity, and has the ability to affect
those returns through its power to direct the activities
of the entity. Subsidiaries are fully consolidated from the
date on which control is transferred to the Group. They
are de-consolidated from the date that control ceases.
The Group uses the acquisition method of accounting
to account for business combinations. The consideration
transferred for the acquisition of a subsidiary at the
fair value of the assets transferred, the liabilities
incurred and the equity interest issued by the Group.
The consideration transferred includes the fair value
of any asset or liability resulting from a contingent
consideration arrangement.
Acquisition-related costs are expensed as incurred.
Identifiable assets acquired and liabilities and
contingent liabilities assumed in a business combination
are measured initially at their fair values at the
acquisition date. On an acquisition by acquisition basis,
the Group recognises any non-controlling interest in the
acquisition either at fair value or at the non-controlling
interests proportionate share of the acquiree’s net
assets. The excess of the consideration transferred, the
amount of any non-controlling interest in the acquiree
and the acquisition-date fair value of any previous
equity interest in the acquiree over the fair value of the
Group’s share of the identifiable net assets acquired is
recorded as goodwill.
Contingent consideration is classified either as equity
or a financial liability. Amounts classified as a financial
liability are subsequently re-measured to fair value with
changes in fair value recognised in profit or loss.
Inter-company transactions, balances and unrealised
gains on transactions between Group companies are
eliminated. Unrealised losses are also eliminated unless
the transaction provides evidence of an impairment of
the transferred asset. Accounting policies of subsidiaries
have been changed where necessary to ensure
consistency with the policies adopted by the Group.
Non-controlling interests in the results and equity of
subsidiaries are shown separately in the consolidated
statement of profit or loss & other comprehensive
income, statement of changes in equity and balance
sheet respectively.
b. Associates
Associates are all entities over which the Group
has significant influence but not control, generally
accompanying a shareholding of between 20% and
50% of the voting rights. Investments in associates are
accounted for using the equity method of accounting
after initially being recognised at cost. The Group’s
investment in associates includes goodwill identified on
acquisition, net of an accumulated impairment loss. The
Group’s share of its associates post-acquisition profits
or losses is recognised under ‘Share of (loss) / profit
of associates’ in the statement of profit or loss & other
comprehensive income, and its share of post-acquisition
movements in reserves is recognised in reserves. The
cumulative post-acquisition movements are adjusted
against the carrying amount of the investment. When
the Group’s share of losses in an associate equals or
exceeds its interest in the associate, including any other
unsecured receivables, the Group does not recognise
further losses, unless it has incurred obligations or made
payments on behalf of the associate.
Unrealised gains on transactions between the Group
and its associates are eliminated to the extent of the
Group’s interest in the associates. Unrealised losses
are also eliminated unless the transaction provides
evidence of an impairment of the asset transferred.
Accounting policies of associates have been changed
where necessary to ensure consistency with the policies
adopted by the Group.
2.2. FOREIGN CURRENCY TRANSLATION
a. Functional and presentation currency
Items included in the financial statements of each of
the Group’s entities are measured using the currency
of the primary economic environment in which the
entity operates (‘the functional currency’). The financial
statements are presented in New Zealand dollars
(rounded to thousands), which is the functional and the
presentation currency of all companies in the Group.
b. Transactions and balances
Foreign currency transactions are translated into the
functional currency using the exchange rates prevailing
at the dates of the transactions. Foreign exchange
gains and losses resulting from the settlement of
such transactions and from the translation at year-
end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in
profit or loss.
2.3. STANDARDS ISSUED BUT NOT YET ADOPTED
A number of new standards, amendments to standards
and interpretations are effective for annual periods
beginning on or after 1 July 2018, and have not been
applied in preparing these consolidated financial
statements.
NZ IFRS 15 Revenue from Contracts with Customers -
The standard establishes a comprehensive framework
for determining whether, how much and when revenue
is recognised. It replaces existing revenue recognition
guidance, including NZ IAS 18 Revenue, NZ IAS 11
Construction Contracts and NZ IFRIC 13 Customer
Loyalty Programmes. NZ IFRS 15 is effective for
reporting periods beginning on or after 1 January
2018 with early adoption permitted. Management has
performed a preliminary assessment of the impact of
NZ IFRS 15.
Based on our assessment of the performance
obligations for our revenue streams, Management has
ascertained that the standard will result in a change
in the timing of revenue recognition in the year ended
30 June 2018 due to transit times for a portion of its
transport divisions. The exact amount has not been
fully calculated. Management will finalise its impact
assessment, identifying disclosure changes prior to its
31 December 2018 interim reporting requirements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 8TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
2.3. STANDARDS ISSUED BUT NOT YET ADOPTED
(CONTINUED)
NZ IFRS 9 Financial Instruments - The standard replaces
the existing guidance in NZ IAS 39 Financial Instruments:
Recognition and Measurement. NZ IFRS 9 includes
revised guidance on the classification and measurement
of financial instruments, including a new expected credit
loss model for calculating impairment on financial assets,
and the new general hedge accounting requirements.
It also carries forward the guidance on recognition and
derecognition of financial instruments from NZ IAS 39.
NZ IFRS 9 is effective for reporting periods beginning
on or after 1 January 2018. Management has performed
a preliminary assessment of the impact of NZ IFRS 9.
It is expected that the new expected credit loss model
for calculating impairment on financial assets will
change the way impairment is assessed and recognised
for our accounts receivable balances. The Group does
not currently have any hedge accounting in place and
therefore does not expect any significant impact as a
result of the new general hedge accounting requirements.
NZ IFRS 16 Leases - The standard requires lessees to
account for all leases under a single on-balance sheet
model (subject to certain exemptions) in a similar way
to finance leases under NZ IAS 17. Lessees recognise a
liability to pay rentals with a corresponding asset, and
recognise interest expense and depreciation separately.
Lessor accounting is substantially the same as NZ IAS
17’s dual classification approach. Application of NZ IFRS
16 is required for periods beginning on or after 1 January
2019 with early adoption permitted but not before an
entity applied NZ IFRS 15. Management has performed a
preliminary assessment of the impact of NZ IFRS 16. The
Group’s main significant operating leases relate to fleet
and property. The Group will recognise a liability to pay
rentals and recognise a corresponding asset for these
premises. The Group continues to progress the status of its
impact assessment.
Consideration of which transition option to utilise is still
being determined.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 9TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
3. FINANCIAL RISK MANAGEMENT
The Group’s principal financial instruments comprise bank loans and overdrafts, cash, trade creditors and accruals and
trade debtors. The main purpose of these financial instruments is to raise and provide working capital for the Group’s
operations.
This note explains the Group’s exposure to financial risks and how these risks affect the Group’s future financial
performance.
RiskExposure arising fromMeasurement
Credit riskCash and cash equivalents and trade receivablesAging analysis & credit ratings
Market risk - interest rateLong term borrowing at variable ratesSensitivity analysis
Liquidity riskBorrowings and other liabilitiesRolling cash flow forecast
The Group’s risk management is carried out by a central treasury department (Group Treasury). The policies are being
reviewed by Management and the Board.
3.1. CREDIT RISK MANAGEMENT
In the normal course of business the Group incurs credit risk from trade debtors and transactions with financial
institutions. The Group has a credit policy that it uses to manage this risk. As part of this policy limits on exposures with
counter-parties have been set and approved by the Board of Directors and are monitored on a regular basis.
The Group has no significant concentrations of credit risk. The Group does not require any collateral or security to
support financial instruments due to the quality of the financial institutions and trade debtors dealt with. The Group
normally gives 30 or 60 days credit on its trade receivables.
At 30th June the Group’s credit risk exposure is equal to the carrying value of its financial assets.
2018
$000
2017
$000
Trade and other receivables
Current receivables36,24129,807
Outstanding 30 to 60 days7,3156,100
Outstanding 60 to 90 days8921,724
Outstanding more than 90 days6871,234
Total trade and other receivables45,13538,865
Sundry receivables276148
Advances to associates603477
Cash and short term bank deposits
Bank with AA credit rating2,8812,966
a. Impaired trade receivables
Individual receivables which are known to be uncollectible are written off by reducing the carrying amount directly. The
other receivables are assessed collectively to determine whether there is objective evidence that an impairment has been
incurred but not yet been identified. For these receivables the estimated impairment losses are recognised in a separate
provision for impairment. The Group considers that there is evidence of impairment if any of the following indicators are
present:
• significant financial difficulties of the debtor
• probability that the debtor will enter bankruptcy or financial reorganisation, and
• default or delinquency in payments (more than 60 days overdue).
Receivables for which an impairment provision was recognised are written off against the provision when there is no
expectation of recovering additional cash.
Impairment losses are recognised in profit or loss within other expenses. Subsequent recoveries of amounts previously
written off are credited against other expenses.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 10TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
3.1 CREDIT RISK MANAGEMENT (CONTINUED)
Movements in the provision for impairment of trade receivables that are assessed for impairment collectively are as
follows:
2018
$000
2017
$000
At 1 July750462
Provision for impairment recognised during the year121316
Receivables written off during the year as uncollectible(520)(28)
At 30 June 351750
During the year, the following gains/(losses) were recognised in profit or loss in relation to impaired receivables.
2018
$000
2017
$000
Impairment losses
Individually impaired receivables2151
Movement in provision for impairment 10081
Total121132
As at 30 June 2018 trade receivables of $1,228,000 (2017: $2,208,000) were past due (over 60 days) but not impaired.
These relate to a number of independent customers for whom there is no recent history of default. The aging analysis
of these trade receivables is as follows:
2018
$000
2017
$000
Up to 3 months past due8921,724
3 to 6 months past due336484
The other classes within trade and other receivables do not contain impaired assets and are not past due. Based on
the credit history of these other classes, it is expected that these amounts will be received when due. The Group does
not hold any collateral in relation to these receivables.
3.2. INTEREST RATE RISK
The Group’s main interest rate risk arises from long term borrowing with variable rates which expose the Group to cash
flow interest rate risk.
Sensitivity analysis
The effect of a 1% increase or decrease in the floating interest rates for the Group would be a decrease/increase in
profit and equity of $745,000 (2017: $0).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 11TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
3.3. LIQUIDITY RISK
Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate
amount of committed credit facilities. Due to the dynamic nature of the underlying businesses, the Group maintains
flexibility in funding through having flexible funding lines available to them. Management monitors rolling forecasts of
the Group’s liquidity reserve, which comprises its undrawn borrowing facility and cash and cash equivalents (note 12.1) on
the basis of expected cash flows.
The Group had access to the following undrawn borrowing facilities at the end of the reporting period:
2018
$000
2017
$000
Expiring within one year (bank overdraft)10,000-
Expiring beyond one year (bank loans)4,300-
Total14,300-
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal
their carrying balances or the impact of discounting is not significant.
Less than 1
year
Between 1 and
2 years
Between 3 and
5 years
Total
contractual
cash flows
Carrying
amount
(assets)/
liabilities
$000$000$000$000$000
2017
Borrowings5050155255165
Trade and other payables29,746--29,74629,746
Employee entitlements11,031--11,03111,031
Contingent consideration-572-572572
Total 40,82762215541,60441,514
2018
Borrowings6,9763,25072,40582,63173,879
Trade and other payables31,670--31,67031,670
Employee entitlements
11,751--11,75111,751
Contingent consideration
2,192--2,1922,192
Total52,5893,25072,405128,244119,492
Bank Guarantee
Transport Investments Limited provides (via ASB Bank) guarantees to (2017: Guarantees were held with the ANZ Bank):
In favour of$000
Chevron (Z Energy 2015) Limited4,500
Goodman Properties550
Mainland Income Fund 3 Limited430
BP Oil NZ Limited250
3.4. CAPITAL RISK MANAGEMENT
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in
order to maintain an optimal capital structure to reduce the cost of capital.
The Group’s capital structure is managed and adjustments are made, with Board approval, to the structure in the light of
economic conditions at the time. There were no changes to objectives, policies or processes during the year.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 12TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition,
seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
a. Estimated impairment of goodwill
The Group tests annually whether goodwill has suffered any impairment. The recoverable amounts of cash-generating
units have been determined based on value-in-use calculation. These calculations require the use of estimates. Refer to
note 13.2 for further details.
b. Estimate: contingent consideration
In the event that the EBITDA level (earnings before interest, tax, depreciation and amortisation) of MOVE Logistics Ltd,
Southern Fleet Leasing Ltd and UNITE Logistics Ltd (the entities) for the 12 months ended 30 June 2018 is above a level
prescribed at the time of acquisition, then additional consideration of up to $10,000,000 may be payable.
Upon acquisition of MOVE Logistics Ltd and Southern Fleet Leasing Ltd in June 2017, an estimate of the amount of
contingent consideration payable of $572,000 was recognised. This estimate was based on a probability weighted
average of possible EBITDA scenarios. The performance of the entities has improved since this estimate was made.
Management has therefore reassessed the estimated contingent consideration payable as at 30 June 2018. Management
has recognised an additional liability and corresponding profit & loss expense of $1,395,000.
The sale and purchase agreement allows for adjustments (sale and purchase adjustments) under specific clauses to the
base level of EBITDA. The EBITDA for the entities for the year ended 30 June 2018 is known by the Group. However, there
is still estimation required by management regarding the determination and quantification of the adjustments noted in
the sale and purchase agreement. We are currently seeking to agree these adjustments with the vendor.
When forming managements view in estimating the potential amount payable they engaged an independent and
qualified accounting firm to provide a view on the appropriateness and quantification range of the sale and purchase
adjustments. The assessment has also considered whether or not each adjustment is in line with commercial practice.
Management has determined a range of $100,000 to $2,000,000. The Group has recognised a provision at the upper
level of this range. The estimate involves significant judgement. It is understood by management that the vendor
estimates the level of adjustments would result in a payment significantly in excess of the above range.
c. Basis of accounting for the carve out of comparative financial information
The comparative financial information is based on the financial statements of Bowker Holdings 99 Limited Group
(formerly Transport Investments Limited) and has been adjusted to exclude the following expenses, income, assets and
liabilities that are not related to the ongoing Business:
Expenses / Income excluded:
• All income and expenses relating to subsidiaries not forming part of the new Business
• External interest costs
Assets / Liabilities excluded:
• All assets, liabilities and equity relating to a property subsidiary not forming part of the new Business
• Cash, accounts payable and accrued interest for Bowker Holdings 99 Limited (not part of transaction)
• External debt (repaid prior to reverse acquisition)
Equity is the residual after excluding the above transactions and balances. The above balances have been included within
the ‘Capital distribution to company shareholders’ line in the Statement of Cash Flows.
Provided below is a reconciliation of the comparative information to that reported in the audited financial statements of
Transport Investments Limited (now Bowker Holdings 99 Limited). Explanation of adjustments has been included.
Comprehensive Income Reconciliation 12 months to
June 2017
$000
Audited Transport Investments Limited Group6,092
Add back: External Interest
677
Less: Subsidiaries not acquired
1
(756)
Comparative TIL Logistics Group Ltd6,013
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 13TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)
Assets & Liabilities Reconciliation
Assets
30 June 2017
$000
Liabilities
30 June 2017
$000
Audited Transport Investments Limited Group186,642145,013
Less:
Assets / liabilities of parent company not acquired (38)(565)
External debt of parent not transferred
2
-(76,063)
Subsidiaries not acquired
1
(37,784)(22,383)
Comparative TIL Logistics Group Ltd 148,82046,002
Cash flow reconciliation
Previously
stated
Adjustment
Comparative
restated
$000$000$000
Net cash generated from operating activities
17,310(1,198)16,112
Net cash used in investing activities
(45,252)1,599(43,653)
Net cash flow from financing activities
29,44412529,569
1 The property subsidiary of Transport Investments Limited was not acquired. The adjustment relates to removing the property assets and
associated borrowings. The profit & loss was impacted by rent, interest and depreciation expense. The cash flow was also impacted by the
aforementioned items.
2 The subsidiaries were acquired free of the Parent’s debt used to fund the subsidiaries. As a result, the new Group obtained external
borrowings and used these proceeds to pay Transport Investments Limited for their interest in the assets and businesses acquired.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 14TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
5. RECONCILIATION TO GAAP MEASURE - ADJUSTED EBITDA
Additional reporting measures have been referred to in the notes to the financial statements. The following non-GAAP
measures are relevant to the understanding of the Group’s financial performance:
• EBITDA (a non-GAAP measure) represents profit before income taxes (a GAAP measure), excluding interest
income, interest expense, depreciation and amortisation, share of (loss)/profit of associates and impairment of
goodwill, as reported in the financial statements.
• Adjusted EBITDA (a non-GAAP measure) represents EBITDA adjusted for non trading costs.
In order to show a meaningful representation of the Group’s financial results the Group presents a reconciliation showing
the financial results after adjustment for costs associated with the public listing, as well as adjustments for contingent
consideration, interest costs, depreciation and share-based payments. The inclusion of these non-GAAP measures, in the
Directors’ opinion, will assist users to understand the performance of the Group and promote comparison with the wider
industry. These measures are also used by the Group’s lenders to assess performance and covenant compliance.
Reconciliation to GAAP measure 12 months to June
2018
12 months to June
2017
Net (loss) / profit before income tax (GAAP measure)(9,173)7,974
Add back:
Share of loss / (profit) of associates 127(50)
Impairment of goodwill159-
Finance costs / (interest income)3,3291,570
Depreciation & amortisation 12,4178,133
EBITDA (non-GAAP measure) 6,85917,627
Non trading transaction costs:
Share based payments 11,593-
Listing costs 6,545-
Deferred consideration expensed* 1,191-
Adjusted EBITDA (non-GAAP measure) 26,18817,627
*The increase in deferred consideration relates to a prior period business acquisition. The Directors believe adjustment for this item assists
the users to gain a better understanding of the underlying performance of the Group.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 15TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
6. SEGMENT INFORMATION
Operating segments are reported in a manner consistent with the internal reporting to the chief operating decision maker
(CODM). The CODM, who is responsible for allocating resources and assessing performance of the operating segments,
has been identified as the Group CEO.
Management has determined the operating segments based on the reports reviewed by the Group CEO. In addition to
GAAP measures, the Group CEO also uses non-GAAP measures (EBITDA and adjusted EBITDA) to assess the commercial
performance of the segments. The reportable operating segments have been determined as:
FREIGHTING
This segment provides nationwide freight transport services with regional strength. It is able to transport a wide range of
freight types, including dangerous goods.
LOGISTICS
This segment specialises in warehousing and supply chain capabilities which enable comprehensive supply chain
solutions to customers. Following acquisitions in the second half of the year ended 30 June 2017 this segment was
formed.
ASSET MANAGEMENT
This segment includes the entities within the Group responsible for fleet asset ownership.
ALL OTHERS
This segment includes our freight forwarding and corporate services companies. These operating segments have been
aggregated based on quantitative thresholds as permitted by NZIFRS 8.
The segment information provided to the Group CEO for the year ended 30 June 2018 is as follows:
FreightingLogisticsAsset
Management
All Other
Segments
Total
$000$000$000$000$000
Year ended 30 June 2017
Total segment revenue 218,26712,14710,7266,042247,182
Inter-segment revenue (1,089)(101)(10,709)(17)(11,916)
Revenue from external customers 217,17812,046176,025235,266
EBITDA7,1498888,79979117,627
Adjusted EBITDA (refer note 5) 7,1498888,79979117,627
Assets 48,03663,65526,79110,338148,820
Liabilities26,56121,6677,257(9,483)46,002
Year ended 30 June 2018
Total segment revenue 225,15898,61213,8307,345344,945
Inter-segment revenue (4,319)(1,330)(13,740)(4)(19,393)
Revenue from external customers 220,83997,282907,341325,552
EBITDA7,2377,25211,376(19,006)6,859
Adjusted EBITDA (refer note 5) 7,2377,04911,37652626,188
Assets51,35455,25828,86916,237151,718
Liabilities29,13611,9214,47878,214123,749
Interest income and expense are not allocated to segments, as this type of activity is driven by the central treasury
function, which manages the cash position of the Group.
Sales between segments are eliminated on consolidation. The amounts provided to the CODM with respect to segment
revenue are measured in a manner consistent with that of the financial statements.
Reportable segments have been determined by having regard to:
• the nature of services provided
• the processes the various business units undertake to service customers
• the type of customers serviced, and
• the nature of the distribution channels.
The Group has a diverse range of customers from various industries, with only one customer contributing more than
10% of the Group’s revenue. This customer is attributed to the freighting segment and contributes revenue of
approximately $43,700,00 (2017: $40,900,000).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 16TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
7. REVENUE & OTHER SOURCES OF INCOME
Revenue comprises the fair value of the consideration received or receivable for the sale of services in the ordinary
course of the Group’s activities. Revenue is shown net of GST, returns, rebates and discounts and after eliminating sales
within the Group.
a. Sales of services
Freight Revenue
Revenue for all domestic contracted deliveries is recognised as delivery is performed.
Trading revenue
Revenue derived from international freight forwarding is recognised once the shipment has been completed. Several
subsidiary companies derive the greater part of their revenue from customs clearance work that involves a high degree
of disbursements on behalf of customers. Revenue is recognised on a net basis after disbursements as the subsidiary
companies are acting as agent for the customer.
Warehousing revenue
Fees for warehousing are recognised as services are provided to the customer.
The Group derives the following types of revenue:
2018
$000
2017
$000
Freight280,714220,755
Warehousing36,8317,800
Trading8,0076,711
Total Revenue325,552235,266
b. Interest income
Interest income is recognised on a time-proportion basis using the effective interest method.
c. Dividend income
Dividend income is recognised when the right to receive payment is established.
d. Rental income
Lease income from operating leases where the group is a lessor is recognised as rental income on a straight-line basis
over the lease term.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 17TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
8. OPERATING EXPENSES BY NATURE
2018
$000
2017
$000
Transport costs
1
139,731112,989
Employee expenses (note 8.1)114,90280,627
Property lease expenses18,87311,098
Operation lease expenses12,9325,782
Trading and warehousing expenses3,3451,749
Communications3,4602,450
Occupancy costs3,9902,382
Bad Debts121132
Foreign exchange (gain)/loss2218
Remuneration paid to principal auditors (PwC)
Assurance services
Audit and review (2018 only) of financial statements, including associated
disbursements
303185
Other assurance services
2
213-
Non assurance services
Acquisition due diligence
3
207377
Other advisory services related to the IPO
4
292-
Donations7843
Directors fees 32111
Depreciation and amortisation12,4178,133
Share based payment expense11,593-
IPO / Listing costs5,833-
Impairment of goodwill159-
Net increase in contingent consideration
5
1,191-
Other expenses7,2583,786
Total operating expenses337,241229,762
1 Includes costs relating to transportation including road user charges (RUC), fuel, tyres, repairs and maintenance, owner driver and subcontractor costs.
2 Other assurance services relate to the provision of a limited assurance investigating accountants report in respect of the Group’s listing documents. The provision
of other assurance services, against recognised assurance standards, does not typically create an independence risk.
3 Financial, tax and IT due diligence was provided to the Group in respect of business combinations that occurred in the period. A team separate to the audit team
was used to undertake this engagement. The work related to review of historic financial information of the targets. Accounting advice in respect to purchase price
accounting was not provided. As such, no self review threat exists.
4 Other advisory services relate to the Group’s reverse acquisition and listing on the NZX. As part of the reverse listing process the Group appointed PwC to
provide tax and other advisory services. The services provided were performed by a team separate to the audit. They related to providing comment on the listing
documents. At all times the Group was responsible for decision making.
5 The net increase in contingent consideration is the result of the additional MOVE Logistics Ltd provision required (refer note 4.b) and the reversal of $225,000
relating to the contingent consideration on the Glassworks Logistics Ltd and Seamont Enterprises Ltd acquisition (refer note 8).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 18TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
8. OPERATING EXPENSES BY NATURE (CONTINUED)
8.1. EMPLOYEE BENEFITS EXPENSE
a. Superannuation benefits
The Group operates a defined contribution superannuation scheme. The scheme is funded through employee and Group
contributions to a trustee-administered fund. The Group has no further payment obligations once contributions have
been paid. Contributions are recognised as an employee benefits expense where they are due.
TIL Freighting Limited has a defined contribution company superannuation scheme that has been operating for a
number of years. The Company has three contribution rates:
4% of salary/wage for general staff
6% of salary for managers
10% of salary for senior managers
Members contribute a minimum of 4% of their salary/wage and can go as high as 15%. The Company contributions are
vested to the member at the rate of 20% per year of service with the Company i.e. 100% after five years of service.
b. Other employee benefits
Liabilities for wages and salaries, including non-monetary benefits and accumulating sick leave that are expected to
be settled wholly within 12 months after the end of the period in which the employees render the related service are
recognised in respect of employees’ services up to the end of the reporting period and are measured at the amounts
expected to be paid when the liabilities are settled.
c. Long service leave
The liabilities for long service leave and annual leave are not expected to be settled wholly within 12 months after
the end of the period in which the employees render the related service. They are therefore measured as the present
value of expected future payments to be made in respect of services provided by employees up to the end of the
reporting period using the projected unit credit method. Consideration is given to expected future wage and salary
levels, experience of employee departures and periods of services. Expected future payments are discounted using
market yields at the end of the reporting period of high-quality corporate bonds with terms and currencies that match,
as closely as possible, the estimated future cash outflows. Remeasurement as a result of experience adjustments and
changes in actuarial assumptions are recognised in profit or loss.
d. Profit-sharing and bonus plans
The Group recognises a liability and an expense for bonuses and profit-sharing based on a formula that takes into
consideration the profit attributable to the Company’s shareholders after certain adjustments. The Group recognises a
provision where contractually obliged or where there is a past practice that has created a constructive obligation.
2018
$000
2017
$000
Wages and salaries & other related costs112,07178,657
Superannuation fund contributions2,4551,741
Fringe benefit tax376229
Total114,90280,627
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 19TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
9. INCOME TAX EXPENSE
The tax expense for the year comprised current and deferred tax. Tax is recognised in the profit or loss component
of the statement of profit or loss & other comprehensive income except to the extent that it relates to items
recognised directly in other comprehensive income or directly in equity. In this case, the tax is also recognised in other
comprehensive income or equity respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance
sheet date in the countries where the Company and its subsidiaries operate and generate taxable income.
2018
$000
2017
$000
Current tax on (loss) / profits for the year(2,754)(1,956)
Adjustments in respect to prior years(7)121
Deferred tax271(126)
(2,490)(1,961)
The prima facie income tax expense on pre-tax accounting profit from operations reconciles to the income tax expense
in the financial statements as follows:
2018
$000
2017
$000
(Loss) / profit before income tax(9,173)7,974
Impairment of goodwill(159)-
Share of (loss) / profit of associates(127)50
(8,887)7,924
Prima facie tax payable at 28%2,488(2,219)
Tax effects of:
Income not subject to tax56070
Timing differences not in deferred tax(63)21
Expenses not deductible(5,468)(220)
Tax impact of ‘carve out’-266
Prior year adjustment(7)121
Income tax (credit)/expenses(2,490)(1,961)
Imputation credits
2018
$000
2017
$000
Imputation credits available for use in subsequent periods6,3603,317
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 20TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
10. DIVIDENDS PAID AND PROPOSED
Dividends to the company shareholders are recognised in the Group’s financial statements in the period in which the
dividends are declared.
2018
$000
2017
$000
Recognised Amounts
Final fully imputed dividend for 2017: 0 cents (2016: 0 cents)--
Interim fully imputed dividend for 2018: 0 cents (2017: 0 cents)--
Dividends not recognised at the end of the reporting period
Since year end the Directors have recommended the payment of a final dividend
of 2.3 cents per fully paid ordinary share (2017: 0 cents). The dividend will be fully
imputed. The aggregate amount of the proposed dividend that will be paid out of
retained earnings at 30 June 2018 but is not yet recognised as a liability at year
end.1,874-
11. EARNINGS PER SHARE
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is computed based
on the weighted average number of ordinary shares outstanding during the period. Diluted EPS is computed based on
the weighted average number of ordinary shares plus the effect of dilutive potential ordinary shares outstanding during
the period.
12 months to 30 June 2018
12 months to
30 June 2017
Earnings
Earnings (excluding
non-trading
transactions)
Earnings
$000$000$000
(Loss) / profit for the year (11,663)(11,663)6,013
Share based payments 11,593
Listing costs 6,545
Deferred consideration expense 1,191
Earnings, excluding non-trading transaction impact 7,666
Weighted average number of shares77,843,59072,833,334
1
CentsCentsCents
Basic & diluted (loss) / earnings per share (.15).08
Basic & diluted earnings per share, excluding
non-trading impact*
.10
*Note this is a non-GAAP disclosure (refer note 5 for reconciliation)
1 Prior year shares were determined using the number of shares issued in consideration for the reverse listing transaction.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 21TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
12. FINANCIAL ASSETS AND FINANCIAL LIABILITIES
The Group classifies its financial assets as loans and receivables. The classification depends on the purpose for which the
financial assets were acquired. Management determines the classification of its financial assets at initial recognition.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in
an active market. They are included in current assets, except for those with maturities greater than 12 months after the
reporting date which are classified as non-current assets. The Group’s loans and receivables comprise ‘Trade and other
receivables’ and ‘Cash and cash equivalents’ and ‘Advances to associates’ in the balance sheet. Loans and receivables are
initially recognised at fair value and subsequently carried at amortised cost using the effective interest method.
This note provides information about the Group’s financial instruments, including:
• An overview of all financial instruments held by the Group
• Specific information about each type of financial instrument
• Information about determining the fair value of the instruments, including judgements and estimations of
uncertainty involved.
The Group holds the following financial instruments:
LOANS AND RECEIVABLES
Financial AssetsNotes
2018
$000
2017
$000
Cash and cash equivalents
12.1
2,8812,966
Trade and other receivables
1
12.2
45,06038,263
Advances to associates
12.3
603477
Total48,54441,706
1 excluding prepayments
FINANCIAL LIABILITIES AT AMORTISED COST
Financial LiabilitiesNotes
2018
$000
2017
$000
Trade Payables
2
12.4
29,59628,863
Borrowings
12.5
73,879165
Employee entitlements
12.6
11,75111,031
Contingent consideration
12.7
2,192572
Total117,41840,631
2 excluding non financial liabilities
The Group’s exposure to various risks associated with the financial instruments is discussed in note 3. The maximum
exposure to credit risk at the end of the reporting period is the carrying amount of each class of financial assets
mentioned above, other than for trade & other receivables where the maximum credit risk is the balance before
impairment, being $45,411,000 (2017: $39,013,000).
12.1. CASH AND CASH EQUIVALENTS
Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid
investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within
borrowings in current liabilities on the balance sheet.
Cash and cash equivalents include the following for the purpose of the cash flow statement:
2018
$000
2017
$000
Cash and cash equivalents2,8812,966
Bank overdrafts (note 12.5)--
Total2,8812,966
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 22TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
12.2. TRADE AND OTHER RECEIVABLES
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method less provision for impairment. A provision for impairment of trade receivables is established
when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms
of the receivables. Impairment of trade receivables is recognised in profit or loss.
Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation,
and default or delinquency in payments (more than 60 days overdue) are considered indicators that the trade receivable
has been impaired. The amount of the provision is the difference between the asset’s carrying amount and the present
value of the estimated future cash flows, discounted at the original effective interest rate.
2018
$000
2017
$000
Trade receivables45,09938,805
Trade receivables related parties 3660
Less provision for impairment of trade receivables(351)(750)
Net trade receivables44,78438,115
Sundry receivables276148
Financial assets at amortised cost45,06038,263
Prepayments1,5181,086
Total trade and other receivables46,57839,349
Trade receivables are generally due for settlement within 30 to 60 days.
12.3. ADVANCES TO ASSOCIATES
2018
$000
2017
$000
ATL Haulage Ltd275275
TNL International Australia Pty Ltd111127
UNITE Ltd21775
Total603477
These advances are due on demand and are non-interest bearing.
12.4. TRADE AND OTHER PAYABLES
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method.
2018
$000
2017
$000
Trade payables23,52720,401
Trade payables related parties496436
GST payable2,074883
Lease incentive259328
Accrued expenses5,3147,698
Total31,67029,746
Trade payables are unsecured and are usually paid within 30 to 60 days of recognition.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 23TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
12.5. BORROWINGS
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at
amortised cost using the effective interest method. Any borrowings are classified as current liabilities unless the Group
has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.
Borrowing costs are expensed as incurred, unless they relate to the acquisition, construction or production of a qualifying
asset in which case the borrowing costs are capitalised.
When TIL Logistics Group Limited acquired the businesses from Bowker Holdings 99 Limited they entered into a new
banking facility with the ASB Bank on 6 December 2017. The facility includes a revolving committed cash facility of $90
million, an overdraft facility of $10 million and a bank guarantee facility of $5.7 million (refer note 3.3).
30 June
2018
$000
30 June
2017
$000
Non-Current
Secured Loan ASB 70,346-
Secured Loan Mainland Capital 101133
70,447133
Current
Secured Loan ASB 3,400-
Secured Loan Mainland Capital3232
3,43232
Total73,879165
The facilities are secured by way of a first ranking general security over the Group’s assets and undertakings.
The new facilities with the ASB are subject to quarterly covenants with the first reportable period being 31 March 2018.
The Group has complied with these covenants through the period. These include the following:
• Group Coverage Ratio where the Total Tangible Assets and EBITDA of the guaranteeing group must not be less
than 90% of the consolidated group
• Interest Cover Ratio must be greater than 3.00x
• Debt Service Cover Ratio must be greater than 1.20x
• Leverage Ratio must be less than 3.50x
The covenant testing for 2018 is to be normalised by excluding costs associated with the acquisition (e.g. listing costs,
share based payments and contingent consideration).
12.6 EMPLOYEE ENTITLEMENTS
2018
$000
2017
$000
Leave provision7,8167,766
Payroll accruals3,9353,265
Total11,75111,031
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 24TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
12.7 RECOGNISED FAIR VALUE MEASUREMENTS
This section explains the judgement and estimates made in determining the fair values of the financial instruments that
are recognised and measured at fair value in the financial statements.
Level 1Level 2Level 3Total
$000$000$000$000
Recurring fair value measurements
At 30 June 2017
Contingent consideration--(572)(572)
At 30 June 2018
Contingent consideration--(2,192)(2,192)
The following table presents the changes in level 3 items for the periods ended 30 June 2017 and 30 June 2018:
Contingent
consideration
$000
Opening balance 1 July 2016-
Acquisitions(572)
Closing balance 30 June 2017(572)
Acquisitions(450)
Gains/(losses) recognised in other expenses(1,170)
Closing balance 30 June 2018(2,192)
Valuation processes
The finance department of the Group performs the valuations of non-property items required for financial reporting
purposes including level 3 fair values. This team reports directly to the Chief Financial Officer (CFO) and the Risk
Assurance and Audit Committee (RAAC). Discussions of valuation processes and results are held between the CFO,
RAAC and the valuation team at least once every six months, in line with the Group’s half yearly reporting periods.
The main level 3 inputs used by the Group is derived and evaluated as follows:
Contingent consideration
The inputs to this valuation require judgement (refer note 4.b). The main level 3 inputs used by the Group were:
• EBITDA as per the audited financial statements
• Potential adjustments allowed for under the sale and purchase agreement.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 25TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
13. NON-FINANCIAL ASSETS AND LIABILITIES
This note provides information about the Group’s non-financial assets and liabilities, including specific information about
each type of non-financial asset and non-financial liability:
• Property, plant and equipment (note 13.1)
• Intangible assets (note 13.2)
• Deferred tax balances (note 13.3)
• Provisions and other liabilities (note 13.4)
Impairment of non-financial assets
Assets that have an indefinite useful life, for example goodwill and software under development, are not subject to
amortisation and are tested annually for impairment. Assets that are subject to depreciation and amortisation are
reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to dispose and value in
use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash flows (cash-generating units). Non-financial assets, other than goodwill, that suffered an impairment are
reviewed for possible reversal of the impairment at each reporting date.
13.1. PROPERTY, PLANT AND EQUIPMENT
All property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is
directly attributable to the acquisition of the items.
Subsequent costs are included in the assets carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item
can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance
are charged to profit or loss during the financial period in which they are incurred.
Depreciation on assets is calculated using the diminishing value (DV) or straight-line (SL) method, as follows:
Leasehold improvements9.5% to 48%DV
Trucks 14 yearsSL
Trailers18 yearsSL
Plant and equipment 7.5% to 42%DV
Motor vehicles 18% to 36%DV
Office equipment 12% to 60%DV
Furniture and fittings9.5% to 60%DV
The assets’ useful lives are reviewed, and adjusted if appropriate, at each reporting date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised
within ‘Gains on disposal of assets’ in the statement of profit or loss & other comprehensive income.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 26TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
13.1 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Land and
buildings
Motor
vehicles
Office
equipment
and F&F
Plant and
equipment
Work in
progress
Total
$000$000$000$000$000$000
At 1 July 2016
Cost or valuation364112,9342,4015,713760122,172
Accumulated depreciation(227)(66,516)(2,036)(3,830)-(72,609)
Net book value13746,4183651,88376049,563
Year ended 30 June 2017
Additions-4,25820637311,98416,821
Acquisition of subsidiaries7222,4987214,259-27,550
Disposals(56)(450)-(20)(6,054)(6,580)
Transfers-4,480-110(4,590)-
Depreciation charge(11)(7,156)(167)(437)-(7,771)
Closing net book amount14270,0481,1256,1682,10079,583
At 1 July 2017
Cost or valuation380141,5574,07513,2452,100161,357
Accumulated depreciation(238)(71,509)(2,950)(7,077)-(81,774)
Net book amount14270,0481,1256,1682,10079,583
Year ended 30 June 2018
Additions252,69346177412,16216,115
Acquisition of subsidiaries-2,2901340-2,343
Disposals-(6,408)(50)(21)(6,348)(12,827)
Transfers-5,0074792(5,146)-
Depreciation charge(12)(9,010)(448)(1,128)-(10,598)
Closing net book amount15564,6201,1485,9252,76874,616
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 27TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
13.2 INTANGIBLE ASSETS
a. Goodwill
Goodwill represents the excess of the consideration transferred, the amount of any non-controlling interest in the
acquiree, and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the
Group’s share of the identifiable net assets acquired. Goodwill on acquisitions of subsidiaries is included in ‘Intangible
assets’ in the balance sheet. Goodwill on acquisitions of associates is included in ‘Investments in associates’ in the
balance sheet and is tested for impairment as part of the overall balance. Separately recognised goodwill is tested
annually for impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not
reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity
sold.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those
cash-generating units or groups of cash-generating units that are expected to benefit from the business combination on
which the goodwill arose.
b. Computer software
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use the
specific software. These costs are amortised, using the diminishing value method at a rate of 48% and recognised in the
profit or loss. Costs associated with maintaining computer software programmes are recognised as an expense when
incurred.
c. Customer contracts
Acquired customer contracts are recognised at their fair value at the date of acquisition and are subsequently amortised
on a straight-line basis over six years. Amortisation expense is recognised in the profit or loss.
Goodwill
Computer
software
Customer listsTotal
$000$000$000$000
At 1 July 2016
Cost4,6761,2302386,144
Accum. amortisation and impairment(1,974)(1,026)(75)(3,075)
Net book amount2,7022041633,069
Year ended 30 June 2017
Additions-50-50
Acquisition of subsidiaries12,3743438,60021,317
Amortisation/impairment charge-(171)(191)(362)
Closing net book amount15,0764268,57224,074
At 1 July 2017
Cost17,0501,9278,82427,801
Accum. amortisation and impairment(1,974)(1,501)(252)(3,727)
Net book amount15,0764268,57224,074
Year ended 30 June 2018
Additions-1,107-1,107
Acquisition of subsidiary102-1,3071,409
Amortisation/impairment charge(158)(236)(1,583)(1,977)
Closing net book amount 15,0201,2978,29624,613
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 28TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
13.2. INTANGIBLE ASSETS (CONTINUED)
The Group has classified its goodwill into the following cash generating units (CGUs)
2018
$000
2017
$000
TIL Freighting Ltd1,0271,027
Alpha Customs Ltd776934
MOVE Logistics Ltd12,49212,374
TNL International Ltd170186
McAuley’s Transport Ltd555555
Total15,02015,076
The recoverable amount of all CGUs has been determined based on value-in-use calculations. These calculations are
pre-tax cash flow projections based on Board approved financial budgets and a further four year forecast period using
conservative growth levels of less than 2% per annum.
An assumed terminal real growth rate of 0% (2017: 2.0%) has been used in the valuations. The Group has applied
discounted pre-tax cash flows using a rate of 11.5% (2017: 10.5%).
The Group completed sensitivity testing on the CGU’s impairment models as follows: growth rate +/- 1.0%, terminal +/-
1.0%, and discount rates +/- 1.0%. Sensitivity testing demonstrated no issues with impairment headroom in all cases.
13.3. DEFERRED INCOME TAX
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred income
tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business
combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income
tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date
and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is
settled.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available
against which the temporary differences can be utilised.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the
same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle
the balances on a net basis.
Temporary differences arise from the following:
Deferred tax assets/(liabilities)
Opening
balance
Recognised in
income
Acquisition of
subsidiaries
Closing
balance
$000$000$000$000
2017
Property, plant and equipment(997)(204)(4,609)(5,810)
Provisions and accruals1,936784202,434
Total deferred income tax939(126)(4,189)(3,376)
2018
Property, plant and equipment(5,810)239(366)(5,937)
Provisions and accruals2,43432-2,466
Total deferred income tax(3,376)271(366)(3,471)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 29TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
13.4. PROVISIONS FOR OTHER LIABILITIES AND CHARGES
Provisions for make good obligations are recognised when the Group has a present legal or constructive obligation as a
result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount
can be reliably estimated.
Provisions are measured at the present value of Management’s best estimate of the expenditure required to settle the
present obligations at the end of the reporting period.
Lease restoration
Contingent
consideration for
business combination
Total
$000$000$000
At 1 July 2016292100392
Additional provisions5535721,125
Released to profit or loss(47)(100)(147)
At 30 June 20177985721,370
At 1 July 20177985721,370
Additional provisions-1,8451,845
Released to profit or loss(12)(225)(237)
At 30 June 20187862,1922,978
30 June 2018
Current-2,1922,192
Non-current786-786
a. Information about individual provisions and significant estimates
Make good lease provision
The Group is required to restore the leased premises of its depot and warehouses to their original condition at the end of
the respective lease terms. A provision has been recognised for the present value of the estimated expenditure required.
Contingent consideration
The Group has estimated the potential contingent consideration payable by engaging an independent accounting firm
to determine the validity of adjustments to the base level EBITDA of MOVE Logistics Ltd, Southern Fleet Leasing Ltd and
UNITE Logistics Ltd in alignment with the sale and purchase agreement (refer note 4.b).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 30TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
14. SHARE CAPITAL
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in
equity as a deduction, net of tax from the proceeds.
The assessed value of the share based payments and the shares issued in the public offer during the year ended 30 June
2018 was $1.50 per share (2016: $0). The value was independently determined as fair and reasonable by Grant Samuel &
Associates using the capitalisation of earnings approach. This was deemed the most appropriate method as the Group
has relatively stable cash flows and a predictable capital expenditure profile.
30 June 201830 June 2017
Shares$000Shares$000
Issued & paid-up capital - ordinary shares
Balance at the beginning of the period72,833,334 5,473 72,833,334 -
Share based payments:
- Deemed consideration for acquisition of Bethunes452,810 679
- Issued to Directors500,000 750
- Issued to advisors100,000 150
- Issued to Kern Group and associates
1
9,696
Total share based payments 1,052,810 11,275
Shares issued to key management personnel3,000,000
Shares issued to public4,573,339 11,359
Balance at the end of the period81,459,483 28,107 72,833,334 -
1 From the shares Transport Investments Limited received for transferring its assets and business to Bethunes, Kern Group and associates
were paid 6,463,670 shares. These shares are deemed to be part of the capital reorganisation and are included within the opening shares
on issue.
15. INVESTED CAPITAL
Due to the ‘reverse acquisition’ (note 1.2(a)) the carved out equity shown for the year ended 30 June 2017 is disclosed
as invested capital. This is because it represents the net investment of Bowker Holdings 99 Limited in the new reporting
entity (TIL Logistics). This amount was distributed as part of the reverse listing on 6 December 2017.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
16. CASH FLOW INFORMATION
16.1 CASH GENERATED FROM OPERATIONS
2018
$000
2017
$000
Reported (loss)/surplus after tax(11,663)6,013
Non-cash items
Depreciation expense10,5987,771
Amortisation expense1,819362
Bad Debts121132
Amortisation of bank fees145-
Share based payments & IPO costs17,714-
Loss on disposal of property, plant & equipment382
Impairment159-
Foreign Exchange losses/(gains) on operating activities2218
19,29714,296
Impact of changes in working capital
Tax receivable / deferred tax(854)550
Trade and other receivables(7,086)(380)
Creditors and accruals/employee entitlements3,7814,220
Creditors relating to purchase of PPE(2,941)(1,225)
Inventories(51)(12)
12,14617,449
Items classified as investing or financing activities
Profit on disposal of property, plant and equipment(1,921)(1,287)
Profit for associates/discontinued operations127(50)
Net cash flow from operating activities10,35216,112
16.2 NET DEBT RECONCILIATION
This section sets out an analysis of net debt and the movements in net debt for each of the periods presented.
2018
$000
2017
$000
Cash & cash equivalents2,8812,966
Borrowings - repayable within one year (including overdraft)(3,432)(32)
Borrowings - repayable after one year(70,447)(133)
Net debt(70,998)2,801
Cash and liquid investments2,8812,966
Gross debt - fixed interest rates(133)(165)
Gross debt - variable interest rates(73,746)-
Net debt(70,998)2,801
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 32TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
16.2 NET DEBT RECONCILIATION (CONTINUED)
Cash/bank
overdraft
Borrowing due
within 1 year
Borrowing due
after 1 year
Total
$000$000$000$000
Net debt as at 1 July 2016938--938
Cash flows2,028(8,525)-(6,497)
Borrowings assumed from acquisitions-(32)(133)(165)
Vendor loan on acquisition-8,525-8,525
Other non-cash movement----
Net debt as at 30 June 20172,966(32)(133)2,801
Cash flows(85)(2,900)(70,668)(73,653)
Other non-cash movements-(500)354(146)
Net debt as at 30 June 20182,881(3,432)(70,447)(70,998)
17. INTEREST IN OTHER ENTITIES
17.1 MATERIAL SUBSIDIARIES
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in note 2.1. All subsidiaries are incorporated in New Zealand.
All subsidiaries results up to 30 June 2018 have been incorporated in the consolidated financial statements.
Shareholding
30 June
2018
Shareholding
30 June
2017
Balance
Date
Principal Activity
TIL Freighting Ltd 100%100%30 JuneTransport operator
Pacific Fuel Haul Ltd100%100%30 JuneTransport operator
Alpha Customs Services Ltd
1
60%70%30 JuneInternational freight forwarder
Pacific Asset Leasing Ltd100%100%30 JuneAsset leasing
Hookers Shipping Ltd100%100%30 JuneShipping agent and logistics
McAuley’s Transport Ltd100%93%30 JuneTransport operator
MOVE Logistics Ltd100%100%30 JuneWarehousing and distribution
Southern Fleet Leasing Ltd100%100%30 JuneAsset leasing
NZL Group Ltd100%100%30 JuneWarehousing and distribution
Multi-Trans HeavyHaul Ltd100%100%30 JuneTransport operator
TNL International Ltd50%50%30 JuneInternational freight forwarder
Appian Transport Ltd100%100%30 JuneNon trading
Global Logistics Group Limited
2
100%-30 JuneNon trading
TNL Freighting Limited100%100%30 JuneNon trading
TNL Logistics Limited100%100%30 JuneNon trading
Transport Nelson Limited100%100%30 JuneNon trading
1 The Group sold 10,000 (10%) of its shares on 12 February 2018 for no consideration.
2 The shares in Global Logistics Group Limited were acquired as part of the reverse acquisition transaction (note 1).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 33TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
17.2 INTERESTS IN ASSOCIATES
Set out below are the associates of the Group as at 30 June 2018 which, in the opinion of the Directors, are material to
the Group. The entities listed below have share capital consisting solely of ordinary shares, which are held directly by
the Group. The country of incorporation or registration is also their principal place of business, and the proportion of
ownership interest is the same as the proportion of voting rights held.
Name of entity
Place of
business/
country of
incorporation
% of ownership
interest
Nature of
relationship
Measurement
method
2018
$000
2017
$000
20182017
UNITE LtdNew Zealand50%50%AssociateEquity method8991,130
ATL LtdNew Zealand50%50%AssociateEquity method962956
Immaterial associates1858
2018
$000
2017
$000
Beginning of the year2,144974
Purchase of UNITE Ltd-1,130
Dividends received(143)(10)
Amalgamation(40)-
Impairment of investment(165)(111)
Earnings from associates83161
Total1,8792,144
The Group’s results of its principal associates, all of which are unlisted, and total assets (including goodwill) and
liabilities, are as follows. The Group equity accounts for these associates based on management reporting for the year
end to 30 June (the Group’s balance date).
AssetsLiabilitiesRevenueProfit
Interest
held
Balance
date
$000$000$000$000%$000
2017
UNITE Ltd
1
2,7922,3355,97426750%31 March
ATL Ltd
5,9684,0648,90048350%
31 August
Total8,7606,39914,874750
2018
UNITE Ltd3,0942,4736,09815350%31 March
ATL Ltd6,2403,7638,4292350%31 August
Total9,3346,23614,527176
1 Acquired June 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 34TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
18. BUSINESS COMBINATIONS
In September 2017 the Group acquired 100% of the voting equity interest and business activity and assets of Glassworks
Logistics Limited and Seamount Enterprises Limited, companies specialising in distribution and warehousing. This
acquisition allowed the Group to expand its business and strengthen its relationship with one of its key customers.
The table below summarises the consideration paid by the Group and the fair value of assets acquired and liabilities
assumed:
$000
Purchase consideration (cash) 3,200
Contingent consideration 450
Fair value of assets acquired and liabilities assumed
Property, plant and equipment 2,343
Customer contracts1,307
Deferred Tax(366)
Goodwill366
There were no contingent assets or liabilities acquired as part of the transaction. The contingent consideration has
been recognised and is based on agreed sales measures. Subsequently $225,000 of the contingent consideration was
reversed to profit or loss under other losses as one of the measures was not met.
Goodwill relates to deferred taxation on the acquired assets. It will not be deductible for tax purposes.
Any direct costs relating to the acquisition were charged to operating expenses in the statement of profit or loss & other
comprehensive income for the twelve months ended 30 June 2018.
Contemporaneously the Group sold the trucks it acquired for $1,325,000 to TR Group in a sale and leaseback
transaction. The lease expense is included under lease expenses in the statement of profit or loss & comprehensive
income.
The acquired business contributed revenues of $5,294,000 and a loss before tax of $94,000 to the Group for the period
1 September 2017 to 30 June 2018. If the acquisition had occurred on 1 July 2017, the revenue and loss before tax for the
year ended 30 June 2018 would have been $6,353,000 and $113,000 respectively.
There were two new business combinations acquired in May and June 2017. The total consideration paid for these
businesses was $48,119,000. The total fair value of assets acquired was $35,745,000 and goodwill of $12,374,000 was
recorded. There is contingent consideration relating to one of the acquisitions which is still to be settled (refer note 12.7,
13.4).
19. CONTINGENCIES
The Group has no contingent liabilities in respect of legal claims arising in the ordinary course of business, (2017: none).
20. COMMITMENTS
a. Capital commitments
Capital expenditure contracted for at the reporting date but not yet incurred is as follows:
2018
$000
2017
$000
Trucks and trailers
11,235
4,415
Total11,2354,415
b. Operating lease commitments
Operating leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are
classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor)
are charged to profit or loss on a straight-line basis over the period of the lease.
The Group leases various property, plant and equipment under non-cancellable operating lease agreements. The
property lease terms are between 1 and 15 years, and the majority of lease agreements are renewable at the end of the
lease period at market rate.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 35TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
20. COMMITMENTS (CONTINUED)
The future aggregate minimum lease payments under non-cancellable operating leases are as follows:
2018
$000
2017
$000
Within one year25,76820,743
Between one and two years
20,62717,650
Between two and five years
47,61230,716
More than five years
63,80823,300
Total157,81592,409
Sub-lease payments
Future minimum lease payments expected to be recovered in relation to non-
cancellable sub-leases of operating leases
3,1102,778
The operating lease commitment for 2018 includes leases for buildings occupied by the Group from external parties
which in 2017 were owned by TIL Properties Ltd (refer note 4c). If this was included in 2017 the total commitments
would be $121,097,000
21. RELATED-PARTY TRANSACTIONS
As explained in note 1, TIL Logistics Group Limited acquired the Business from Bowker Holdings 99 Limited. Part of the
consideration in this transaction was shares issued. Bowker Holdings 99 Limited owns 81.3% (66,253,064) of the shares
in TIL Logistics Group Limited.
21.1 TRANSACTIONS WITH KEY MANAGEMENT
a. Shares issued
# Shares$
Shares acquired in placement 4,666,669 7,000,004
Upon listing, certain key management personnel acquired shares in the entity (2017: nil).
b. Share based payments
# SharesGrant date
FV
Exercise
price
Exercise
date
Share based payments - Directors
1
500,000$1.50nil6/12/2017
Share based payments - Kern Group Ltd and associates
2
6,463,670$1.50nil6/12/2017
The share based payments have no conditions attached to them and they vested immediately after grant date. These
payments were valued at fair value being the grant date share price of $1.50. No cash consideration was received for
these shares (2017: nil).
The fair value of the shares issued is recognised as an employee benefit expense with a corresponding increase in equity.
An expense of $10,989,000 was recognised in profit or loss relating to the two transactions. The market price of shares
on the exercise date was $1.50.
1 Tax liabilities in respect of the shares were also settled by the Group.
2 These shares were issued in exchange for services provided to assist with the listing process. Greg Kern, a TIL Logistics Group director is the majority shareholder
of the Kern Group.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 36TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
21.1 TRANSACTIONS WITH KEY MANAGEMENT (CONTINUED)
c. Key Management Compensation
Key management includes Directors, the MD, the CEO and his direct report:
2018
$000
2017
$000
Salaries and other short term employee benefits
1
1,9741,415
Directors Fees32111
Share based payments - Directors750-
Share based payments - Kern Group Ltd and associates9,696-
21.2 TRANSACTIONS WITH OTHER RELATED PARTIES
The following transactions occurred with related parties:
2018
$000
2017
$000
Sales and purchases of goods and services
Sales of services to associates287191
Purchases of services from associates2,6322,121
Purchases from entities controlled by key management personnel
1
1,5504,352
1 The Group leased properties from entities that are controlled by members of the Group’s key management personnel. The balance for 2018 includes rental
payments made to carved out property subsidiaries prior to the reverse listing. Only $82,000 relates to ongoing rental payments with key management personnel.
2018
$000
2017
$000
Outstanding balances arising from sales and purchases of services
Trade receivables 3660
Trade payables496436
2018
$000
2017
$000
Advances to/from related parties
ATL Limited275275
UNITE Limited21775
TNL International Australia Pty Ltd111127
22. EVENTS AFTER THE REPORTING DATE
Subsequent to year end the Board of Directors have approved payment of the dividend recommended (refer note 10).
The Group has also presented a dividend reinvestment policy.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 37TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
23. COMPARISON TO PROSPECTIVE FINANCIAL INFORMATION
The Group’s Investment Statement and Prospectus dated 17 November 2017 included prospective financial statements
from 1 July 2017 to 30 June 2019. Below is the actual year’s trading result covering the period 1 July 2017 to 30 June 2018,
which is compared to the prospective financial statements.
PROSPECTIVE CONSOLIDATED STATEMENT OF PROFIT OR LOSS & OTHER COMPREHENSIVE INCOME
YEAR ENDED 30 JUNE 2018
Explanation
of material
movements
ACTUAL
30 JUNE 2018
$000
PROSPECTIVE
30 JUNE 2018
$000
Revenue 325,552324,923
Gains on disposal of assets (a)1,921-
Dividends received 2-
Rents received / other income4,0492,886
Total Income 331,524327,809
Operating expenses(b)(305,336)(299,126)
Share based payment expense (11,593)(11,913)
IPO / listing costs (6,545)(7,254)
Changes in contingent consideration(c)(1,191)-
Depreciation/amortisation expenses (12,417)(12,766)
Impairment of goodwill(159)-
Total Operating Expenses (337,241)(331,059)
Finance costs - interest on borrowing (3,431)(3,635)
Interest income on short term deposit102128
Operating (deficit) / surplus before income tax (9,046)(6,757)
Share of (loss) / profit of associates (127)211
(Loss) / Profit Before Income Tax (9,173)(6,546)
Income tax expense (2,490)(3,508)
(LOSS) / PROFIT FOR THE PERIOD FROM CONTINUING
OPERATIONS
(11,663)(10,054)
(Loss) / Profit attributable to:
Owners of the parent(12,191)(10,284)
Non-controlling interests528230
(11,663)(10,054)
Other comprehensive income
Comprehensive Income for the Period, Net of Tax --
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD,
NET OF TAX
(11,663)(10,054)
Adjusted EBITDA26,18628,683
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 38TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
23. COMPARISON TO PROSPECTIVE FINANCIAL INFORMATION (CONTINUED)
PROSPECTIVE CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2018
Explanation
of material
movements
ACTUAL
30 JUNE 2018
$000
PROSPECTIVE
30 JUNE 2018
$000
ASSETS
Current Assets
Cash and cash equivalents (d)2,8817,950
Inventories 279227
Trade and other receivables (e)46,57840,088
Tax Receivable269-
Advances to associates 603477
Total Current Assets 50,61048,742
Non-current Assets
Property, plant and equipment 74,61676,823
Intangible assets 24,61324,752
Investments in associates 1,8792,356
Total Non-Current Assets 101,108103,931
TOTAL ASSETS 151,718152,673
EQUITY
Share capital28,10728,142
Invested capital --
(Accumulated losses) / Retained earnings (1,295)271
Equity attributable to owners of the parent 26,81228,413
Non-controlling interest in equity1,1571,027
TOTAL EQUITY 27,96929,440
LIABILITIES
Current Liabilities
Trade and other payables 31,67034,135
Borrowings 3,432-
Employee entitlements 11,7519,908
Provision for other liabilities and charges(f)2,192-
Tax payable -115
Total Current Liabilities 49,04544,158
Non-current Liabilities
Borrowings 70,44775,500
Deferred income tax liability 3,4713,575
Provisions for other liabilities and charges 786-
Total Non-current Liabilities74,70479,075
TOTAL LIABILITIES 123,749123,233
TOTAL EQUITY & LIABILITIES 151,718152,673
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 39TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
23. COMPARISON TO PROSPECTIVE FINANCIAL INFORMATION (CONTINUED)
PROSPECTIVE CONSOLIDATED STATEMENT OF CASH FLOWS
FOR YEAR ENDED 30 JUNE 2018
Explanation
of material
movements
ACTUAL
30 JUNE 2018
$000
PROSPECTIVE
30 JUNE 2018
$000
Cash flows from operating activities
Receipts from customers (g)323,035327,847
Interest received 102128
Dividends received 2-
Payments to suppliers and employees (306,283)(306,305)
Interest paid (3,286)(3,487)
Income tax paid (3,218)(3,975)
Net cash generated from operating activities 10,35214,208
Cash flows used in investing activities
Purchase of business, net of cash acquired(3,200)(2,134)
Purchase of property, plant and equipment(13,174)(7,614)
Proceeds from sale of property, plant and equipment(h)14,366-
Purchases of intangible assets(1,107)(448)
Advances to associates 11-
Net cash used in investing activities (3,104)(10,196)
Cash flows from financing activities
Repayment of borrowings(16,432)(14,650)
Proceeds from borrowings90,00090,000
Proceeds from share issue11,51011,335
Capital distribution to company shareholders(i)(92,156)(85,752)
Dividends paid to shareholders / non-controlling interests(255)-
Net cash flow from financing activities(7,333)933
Net increase in cash and cash equivalents(85)4,945
Cash and cash equivalents at beginning of period 2,9663,005
Cash and cash equivalents at end of period2,8817,950
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 40TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
23. COMPARISON TO PROSPECTIVE FINANCIAL INFORMATION (CONTINUED)
EXPLANATIONS OF VARIANCES
(a) There were no gains on disposal of assets anticipated in the PFI. The Group entered into several sale and leaseback
transactions during the year relating to fleet.
(b) Property rent costs were higher than PFI levels by $2m, this was offset by higher than expected rental income when
compared to PFI, with an overall positive impact to operating profit. Due to the increasing fuel costs throughout the year
ended 30 June 2018 there was a negative impact of delayed fuel recovery from customers which amounted to $1m. Wage
costs were also higher than forecast due to escalating wage rates due to an acute shortage of drivers with the negative
impact being $1m. Vehicle leases were $2m above PFI levels due to more fleet being leased rather than purchased
outright.
(c) There was no additional contingent consideration for the acquisition of MOVE Logistics and Southern Fleet Leasing
made in June 2017 forecast in the PFI. The acquired businesses have traded above expected levels which has resulted in
an additional provision being booked.
(d) Cash was impacted by the increase in trade receivables as described below in (e).
(e) Several large customers have contracted extended payment terms not planned in the PFI. There were also several
material customers who did not pay their accounts due at the end of June 2018 until the 2nd of July.
(f) The majority of this provision relates to the contingent consideration referred to in (c) above.
(g) Reduced receipts from customers are a direct result of items noted in (e) above.
(h) During the year Management sold fleet and entered into leasing arrangements (as referred to in (a) above).
(i) The PFI did not include all of the required distributions to shareholders, in particular the opening share capital position
of the acquired businesses.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 41TIL LOGISTICS GROUP LIMITED ANNUAL REPORT
NZX WAIVER
An NZX Regulation (“NZXR”) decision was received
by TIL Logistics on 17 November 2017 granting TIL
Logistics a 12 month waiver (“Waiver”) from NZX Listing
Rule 5.2.3 to the extent that, following completion of
the acquisition of the transport and logistics business
of Transport Investments Limited, fewer than 25% of the
ordinary shares in TIL Logistics on issue are held by less
than 500 Members of the Public
1
(each holding at least
a Minimum Holding
2
). The Waiver remains subject to the
following conditions
3
:
• TIL Logistics clearly and prominently discloses the
Waiver, its conditions, and its implications in TIL
Logistics’ half year and annual reports, and in any
offer documents relating to any offer of ordinary
shares undertaken by TIL Logistics, during the
period of the Waiver;
• TIL Logistics consistently monitors the total
number of Members of the Public holding ordinary
shares and the percentage of ordinary shares
held by Members of the Public holding at least a
Minimum Holding;
• TIL Logistics notifies NZXR as soon as practicable
if there is any material reduction to the total
number of Members of the Public holding at least
a Minimum Holding of ordinary shares, and/or the
percentage of ordinary shares held by Members
of the Public holding at least a Minimum Holding;
and
• TIL Logistics provides NZXR with a written
quarterly update of the total number of Members
of the Public holding ordinary shares holding at
least a Minimum Holding and the percentage of
ordinary shares held by Members of the Public
holding at least a Minimum Holding. The quarterly
updates are from the date the Waiver is granted,
for the period of the Waiver. The updates are to be
provided to NZXR within ten business days of the
end of each quarter.
The implication of the Waiver is that the majority of TIL
Logistics’ ordinary shares will not be widely held and
there may be reduced liquidity in the shares.
1 As that term is defined in the NZX Listing Rules.
2 As that term is defined in the NZX Listing Rules.
3 Further information regarding the Waiver can be found in TIL Logistics’
NZX Listing Profile dated 17 November 2017 prepared in connection
with the acquisition of the transport and logistics business of Transport
Investments Limited, a copy of which can be found on TIL Logistics’
website, www.til.kiwi.
NZX WAIVER
DIRECTORS
Danny Chan
Appointed 6 December 2017
Trevor Janes
Appointed 6 December 2017
Gregory Kern
Appointed 6 December 2017
James Ramsay
Appointed 6 December 2017
Lorraine Witten
Appointed 6 December 2017
RISK ASSURANCE & AUDIT COMMITTEE
Lorraine Witten (chair)
Trevor Janes
James Ramsay
Danny Chan
REGISTERED OFFICE AND ADDRESS FOR SERVICE
330 Devon Street East
New Plymouth
AUDITORS
PricewaterhouseCoopers
BANKERS
ASB Bank
North Wharf
12 Jellicoe Street, Auckland
SOLICITORS
Harmos Horton Lusk Limited
Vero Centre
48 Shortland Street, Auckland
SHARE REGISTRAR
Link Market Services Limited
Deloitte Centre
80 Queen St, Auckland
DIRECTORY
GOVERNANCE AND REMUNERATION COMMITTEE
Gregory Kern (chair)
Danny Chan
Trevor Janes
---
PricewaterhouseCoopers, 113-119 The Terrace, PO Box 243, Wellington 6140, New Zealand
T: +64 4 462 7000, F: +64 4 462 7001, pwc.co.nz
Independent auditor’s report
To the shareholders of TIL Logistics Group Limited
The consolidated financial statements comprise:
the consolidated balance sheet as at 30 June 2018;
the consolidated statement of profit or loss and other comprehensive income for the year then
ended;
the consolidated statement of changes in equity for the year then ended;
the consolidated statement of cash flows for the year then ended; and
the notes to the consolidated financial statements, which include a summary of significant
accounting policies.
Our opinion
In our opinion, the consolidated financial statements of TIL Logistics Group Limited (the Company),
including its subsidiaries (the Group), present fairly, in all material respects, the financial position of
the Group as at 30 June 2018, its financial performance and its cash flows for the year then ended in
accordance with New Zealand Equivalents to International Financial Reporting Standards (NZ IFRS)
and International Financial Reporting Standards (IFRS).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs
NZ) and International Standards on Auditing (ISAs). Our responsibilities under those standards are
further described in the Auditor’s responsibilities for the audit of the consolidated financial
statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
We are independent of the Group in accordance with Professional and Ethical Standard 1 (Revised)
Code of Ethics for Assurance Practitioners (PES 1) issued by the New Zealand Auditing and Assurance
Standards Board and the International Ethics Standards Board for Accountants’ Code of Ethics for
Professional Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
Our firm carried other services for the Group in the areas of:
other assurance services relating to the provision of an Investigating Accountants Report for the
Group’s listing profile document;
financial, tax and information technology due diligence for various business acquisitions; and
advisory services related to the Initial Public Offering.
The provision of these other services has not impaired our independence as auditor of the Group.
Our audit approach
Overview
An audit is designed to obtain reasonable assurance whether the financial
statements are free from material misstatement.
Overall Group materiality: $737,000, which represents 2.5% of earnings
before interest and tax, adjusted for costs associated with the reverse
listing, including share based payments, and expenses recognised in respect
of contingent consideration on business combinations.
We chose earnings before interest and tax adjusted for the previously
mentioned transactions because, in our view, it is the most appropriate
benchmark to assess the performance of the Group for the period.
We have determined that there are two key audit matters:
Accounting for the reverse acquisition
Contingent consideration on the MOVE business combination
Materiality
The scope of our audit was influenced by our application of materiality.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
including the overall Group materiality for the consolidated financial statements as a whole as set out
above. These, together with qualitative considerations, helped us to determine the scope of our audit,
the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both
individually and in aggregate on the consolidated financial statements as a whole.
Audit scope
We designed our audit by assessing the risks of material misstatement in the consolidated financial
statements and our application of materiality. As in all of our audits, we also addressed the risk of
management override of internal controls including among other matters, consideration of whether
there was evidence of bias that represented a risk of material misstatement due to fraud.
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an
opinion on the consolidated financial statements as a whole, taking into account the structure of the
Group, the accounting processes and controls, and the industry in which the Group operates.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the consolidated financial statements of the current year. These matters were addressed in
the context of our audit of the consolidated financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter How our audit addressed the key audit matter
Accounting for the reverse acquisition
As described in note 1.2, to facilitate a
listing on the NZX, Transport Investments
Limited (TIL) (renamed Bowker Holdings
99 Limited) undertook a transaction with
Bethunes Investments Limited (BIL) on 7
December 2017. The transaction resulted
in BIL, as the listed entity, being acquired
via a reverse acquisition by TIL. The
continuing entity was renamed TIL
Logistics Group Limited.
The accounting for the Company’s reverse
acquisition of Bethunes Investments
Limited is a key audit matter due to the
accounting complexity of the transaction,
and the level of audit effort involved.
Management judgement was required to
determine that BIL did not meet the
definition of ‘business’ and could not be
accounted for as a business combination.
Since shares in the Company were
transferred to BIL shareholders in
consideration for the BIL listing,
Management concluded that the
transaction was more appropriately
accounted for as a share based payment.
Additionally, Management applied
judgement to conclude that the basis of
preparation of the financial statements,
including comparative information,
should be analogised to that of a ‘reverse
acquisition’. The financial statements were
therefore prepared as if the business of
Bowker Holdings 99 Limited continued
post transaction. Adjustments were made
to comparative information to remove
assets and liabilities not transferred in the
transaction.
Finally, management exercised judgement
to conclude that certain costs associated
with the transaction, including shares
issued to related parties, were share-based
payments and did not form consideration
for the reverse acquisition.
To obtain an understanding of the transaction, we read
the sale and purchase agreements between the entities
involved and the Listing Profile document. We used an
accounting specialist to challenge the conclusions
reached by management. Our specialist assessed the
Company’s conclusions against the requirements of
the relevant accounting standards, including
interpretation guidance and authoritative support.
These conclusions included:
the use of reverse acquisition accounting as the
basis of preparation of the financial statements
the determination that the transaction was a share
based payment, and
the treatment of the specific costs incurred as part
of the reverse listing transaction as share based
payments.
In determining the treatment of the reverse acquisition
costs, specifically shares provided to related parties,
we considered the nature of the services provided. The
services related to activities associated with obtaining
the listing, rather than being consideration for assets
transferred.
Comparative information disclosed in the financial
statements is that of the continuing business of the
accounting acquirer, TIL. We:
agreed comparative information to previously
audited consolidation schedules of TIL;
tested adjustments made by management for
assets and liabilities not transferred as part of the
transaction to the previously audited
consolidation schedules;
considered the principles applied in disclosing the
changes in equity from the share-based payment
transactions and the resulting net equity of the
carved out TIL business based on our
understanding of the transaction.
Our procedures did not result in any significant
findings surrounding the accounting for the
transaction.
Key audit matter How our audit addressed the key audit matter
Contingent consideration on the MOVE
business combination
In June 2017, TIL acquired MOVE
Logistics Limited. The terms of the sale
and purchase agreement state that
additional contingent consideration is
payable if earnings before interest, tax,
depreciation and amortisation, adjusted
for certain items detailed within the
contract (Adjusted EBITDA) for the year
ended 30 June 2018 exceeds a
predetermined level. The seller and
purchaser have not yet agreed on the exact
Adjusted EBITDA achieved.
The material nature of the provision, and
the significant judgement and estimation
involved in assessing the likely contingent
consideration makes this a key audit
matter.
At year end, management has provided
$2.0 million for estimated contingent
consideration based on:
their understanding of the terms of the
agreement,
obtaining independent expert advice
as to the nature and value of the
adjustments to EBITDA, and
calculating their best estimate of the
amount expected to settle the
obligation.
Refer to note 4 to the financial statements.
In assessing the appropriateness of management’s
estimate of the contingent consideration recognised,
we:
obtained a copy of the signed sale and purchase
agreement and understood the terms specifically
relating to the contingent consideration;
obtained a copy of the independent expert’s advice
and assessed their considerations against the
terms of the sale and purchase agreement;
understood the terms under which management’s
independent expert was engaged; and
understood management’s assumptions in
calculating their estimate, as well as confirming the
mathematical accuracy of the calculations.
Because of the sensitivity involved in estimating the
contingent consideration, there is a range of values
against which we assessed the value by management.
Based on the procedures performed above, there are
no matters to report.
Information other than the financial statements and auditor’s report
The Directors are responsible for the annual report. Our opinion on the consolidated financial
statements does not cover the other information included in the annual report and we do not, and will
not express any form of assurance conclusion on the other information. At the time of our audit, there
was no other information available to us.
In connection with our audit of the consolidated financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially inconsistent
with the consolidated financial statements or our knowledge obtained in the audit, or otherwise
appears to be materially misstated. If, based on the work we have performed on the other information
that we obtained prior to the date of this auditor’s report, we conclude that there is a material
misstatement of this other information, we are required to report that fact.
Responsibilities of the Directors for the consolidated financial statements
The Directors are responsible, on behalf of the Company, for the preparation and fair presentation of
the consolidated financial statements in accordance with NZ IFRS and IFRS, and for such internal
control as the Directors determine is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the Directors are responsible for assessing the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the Directors either intend to liquidate
the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements, as a whole, are free from material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs NZ and ISAs will always detect
a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these consolidated financial statements.
A further description of our responsibilities for the audit of the financial statements is located at the
External Reporting Board’s website at:
https://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-responsibilities/audit-
report-1/
This description forms part of our auditor’s report.
Who we report to
This report is made solely to the Company’s shareholders, as a body. Our audit work has been
undertaken so that we might state those matters which we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company’s shareholders, as a body, for our
audit work, for this report or for the opinions we have formed.
The engagement partner on the audit resulting in this independent auditor’s report is Kevin Brown.
For and on behalf of:
Chartered Accountants
28 August 2018
Wellington
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.
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